The insurance regulator has hired a law firm owned by Retirement Benefits Authority (RBA) chairman Nelson Havi to represent it in a case against businessman and media owner Samuel Kamau Macharia (SK Macharia) over the alleged withdrawal of Sh400 million from Directline Assurance Company.
The Insurance Regulatory Authority (IRA) has disclosed that it awarded the Sh2.9 million contract to Havi & Co Advocates through direct procurement on July 1 to represent it in the matter until the end of July next year. Mr Havi, a former president of the Law Society of Kenya and now chairman of the RBA, is a senior partner at the law firm.
“Provision of legal services for the representation by external counsel for cases involving Directline Assurance Limited,” reads the contract awards sheet.
The regulator is in a legal row with Mr Macharia-owned Directline Assurance Company as it seeks the reversal of the Sh400 million that is threatening the survival of the top public service vehicles (PSVs) insurer.
The IRA said in court papers that the insurer had breached its licence by engaging in non-insurance business and that Mr Macharia had violated the law by transferring assets of the insurer to a third party.
After moving to court, IRA obtained orders freezing the funds pending the determination of the petition, arguing that policyholders and their beneficiaries were faced irreparable harm. IRA said in the court documents the insurer had unpaid claims of Sh2 billion as at April.
Direcline closed last year with Sh3.4 billion in gross premiums from motor commercial PSV covers, giving it a 61.56 percent market share in the class of business, according to IRA data.
It was followed at a distance by Africa Merchant Assurance (14.95 percent), Invesco (8.15 percent), Pioneer (6.71 percent), and GA insurance (six percent). Only 10 insurers in Kenya currently underwrite commercial buses and matatus.
