Government Takes Action After SK Macharia Dissolved Directline Assurance

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Government Takes Action After SK Macharia Dissolved Directline Assurance

In a dramatic turn of events, the Insurance Regulatory Authority (IRA) has intervened to prevent the closure of Directline Assurance, a leading insurance provider in Kenya.

The move comes after SK Macharia, the company’s owner, announced on Monday, June 10, his decision to dissolve Directline Assurance, terminate its employees, and transfer its assets to Royal Credit Ltd.

However, in a firm statement released on Tuesday, June 11, the IRA declared Macharia’s actions “null and devoid of any legal effect.” The regulatory authority emphasized that Directline Assurance remains fully operational under its licensed and approved status.

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“The purported actions are null and devoid of any legal effect and as such the insurer continues in full operation as licensed and approved by the Authority. The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio,” the IRA stated.

The IRA reassured policyholders that all existing policies with Directline Assurance are still valid and that the insurer is liable for any claims arising from these policies. This move aims to protect the interests of policyholders and maintain confidence in the insurance sector.

“All policyholders of the insurer may continue with their operations in accordance with their insurance contracts,” the statement read.

The regulatory body underscored its exclusive authority to approve, suspend, or cancel the operations of any insurance company in Kenya. The IRA also signaled its readiness to take any necessary actions to ensure the sustainability of Directline Assurance and safeguard policyholders’ interests.

“The Authority will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure sustainability of the insurer and protection of insurance policyholders’ interests,” the IRA concluded.

SK Macharia’s unexpected announcement had included the dissolution of Directline Assurance’s board of directors and the termination of all employee contracts. He claimed that Royal Credit Ltd. had taken over the company’s assets and that Directline would no longer provide insurance services.

“The board of directors of Directline has been dissolved and all the assets taken over by Royal Credit Ltd. All employees have been dismissed, and Directline will no longer issue insurance services,” Macharia announced.

The IRA’s decisive intervention highlights the regulatory body’s commitment to upholding the legal framework governing the insurance industry and protecting the rights and interests of insurance policyholders in Kenya.

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Government Takes Action After SK Macharia Dissolved Directline Assurance

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