Market News

Insurance broker charged with Sh54m premiums theft

Msa court pic

Mombasa Law Courts in this picture taken on July 9, 2020. PHOTO | LABAN WALLOGA | NMG

A businessman in Mombasa has been charged with stealing more than Sh53.8 million owed to four insurance firms as premiums.

Mr Masumali Hassan Ali Meghji is accused of stealing the money through his brokerage firm Masumali Meghji Insurance Brokers Ltd between 2016 and 2019.

The broker failed to remit the outstanding premiums to Sanlam #ticker:SLAM, ICEA Lion, Fidelity and APA Insurance companies.

"Mr Meghji, jointly with others not before the court, being an agent of Scarce Commodities Kenya Ltd and Petrocity Enterprises Ltd, stole Sh53,832,742 from the two companies, which had been entrusted to him for remittance as insurance premiums to the four insurance firms," the charge sheet reads.

According to the court records, Fidelity Insurance is owed Sh21 million, ICEA Lion Sh26 million, APA Sh3.5 million and Sh3 million is in arrears to Sanlam.

Mr Meghji, on Wednesday, appeared before Mombasa Senior Resident Magistrate Vincent Adet. He denied 12 counts of theft and was granted a Sh2 million bond with one surety of a similar amount with an alternative cash bail of Sh500,000.

The broker had been presented before the magistrate in chambers in the morning, where he pleaded to the offence. The record shows that he complained of illness and requested that the charges be read to him alone.

Mr Meghji paid the Sh500,000 cash bail and left the court premises.

The Insurance Regulatory Authority (IRA) has been cracking the whip on agencies flouting rules on remittance of premiums.

Last year, IRA deregistered seven insurance brokers for non-compliance.

This followed an increase in outstanding unremitted premiums that had grown to Sh43 billion, equivalent to 19.8 percent of the Sh216.2 billion gross premiums that Kenya’s 37 insurance firms underwrote in 2018.

Late remittance of premiums exposes businesses, individuals and households to losses of their properties and investments in case of disaster.

The principle stipulates that if an insured party suffers loss before the premium is remitted to the insurer then the insured party cannot be compensated.

The case will be mentioned on October 18.