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Why IRA has put three insurers under caretaker management
Commissioner of Insurance and Insurance Regulatory Authority (IRA) Chief Executive Officer, Mr Godfrey Kiptum speaking during the 19th Annual Regional Conference of the Association of Insurance Brokers of Kenya (AIBK) held at Sarova Whitesands Beach Resort, Mombasa on November 6, 2025.
Three insurers have been placed under statutory management and barred from onboarding new businesses, following several memos from the regulator over various breaches including thin capital.
The Insurance Regulatory Authority (IRA) announced on Wednesday that it has placed three insurers —Trident Insurance Company, Kuscco Mutual Assurance Limited and Corporate Insurance Company— under the caretaker of Policyholders Compensation Fund (PCF).
Some of the letters seen by this publication shows IRA had written to these insurers on several occasions, warning them over breaching the Insurance Act and giving them room to rectify their weaknesses or lose their licenses.
IRA Chief Executive Godrey Kiptum told Business Daily the decision was taken due to continued weakening of the three companies’ ability to meet their financial obligations. The three companies had even failed to prepare financial statements for several quarters including, up to September 2025.
“The board took the decision over continued deterioration of the solvency position of the three companies. PCF will compensate policyholders up to Sh500,000 as provided for in law,” said Mr Kiptum.
“Despite several regulatory interventions and directives issued by the Authority to safeguard policyholders’ interests, the companies did not demonstrate sufficient capacity to restore compliance within the stipulated timelines.”
For instance, letters seen by this publication show, IRA had written to Kuscco Mutual on several occasions. On January 15, 2026, IRA informed Kuscco Mutual that it had recalled the notice of license cancellation it had issued to the insurer on December 17, 2025 after it submitted a remediation plan. However, the insurer failed to act on its own plan, triggering Monday’s move.
Kuscco Mutual had failed to maintain the minimum capital adequacy ratio of 100 percent as required by law and also breached the requirement to have competent and IRA-cleared staff in top management. In addition, it failed to maintain Sh5 million or five percent of its assets (whichever is higher) at the Central Bank of Kenya.
The IRA decision effectively bars the three insurers from entering into any new insurance contracts. Existing customers will have to seek covers from other insurers. The three join the likes of Invesco Assurance, Xplico Insurance, Resolution Insurance, United Insurance and Blue Shield who went into statutory receivership in the recent past.
IRA has appointed PCF as the statutory manager, meaning the institution will take over the affairs of the three insurers for a given time in an attempt to resuscitate them. In case this does not work, the insurers will be moved to the liquidation stage.
“The statutory manager will review and advise. The priority is to revive [with the support of] shareholders,” said Mr Kiptum.
The PCF is an insurance compensation scheme established within the provisions of Section 179 of the Insurance Act to protect policyholders of an insolvent insurance company by paying them compensation for their unsettled claims.
The fund became operational in 2005 and had maintained a Sh250,000 payout limit over the past two decades before doubling the amount in January this year.
General insurers are supposed to maintain minimum capital at a higher of Sh600 million, risk-based capital determined by IRA from time to time or 20 percent of the net earned premiums of the preceding financial year.
For life insurers, the minimum capital is the higher of Sh400 million, risk-based capital determined by IRA from time to time or five percent of the liabilities of the life business for the financial year.
Policyholders contribute 0.25 percent of their premiums to the compensation fund which is matched by their insurance companies. The fund’s size crossed Sh10 billion at the end of June 2023 when the levy for that year was Sh788.26 million.
