Resolution Insurance placed under statutory management for 12 months

Underwriting firm Resolution Insurance has been placed under statutory management owing to operational and financial difficulties.

The Policyholders Compensation Fund (PCF) has been appointed Resolution’s statutory manager for a period of 12 months effective Tuesday.

According to the Commissioner General of Insurance Godfrey Kiptum, Resolution has been facing a number of challenges particularly relating to its ability to meet its obligations and mitigate its inherent risks.

This led to intervention from Kiptum, which was guided by the Insurance Act on a number of occasions, but the insurer still failed to better its position hence it was placed under a receivership manager.

“In particular, the company is not able to settle claims to the detriment of claimants, policyholders and other creditors. The insurer is also not able to comply with statutory requirements relating to capital adequacy, submission of returns and governance structures,” Kiptum said in a statement.

“The authority has had numerous engagements with the management and Board of the insurer to seek solutions to salvage the company. The authority has also considered the various initiatives undertaken by the shareholders to inject capital into the company. Unfortunately, all those measures have not been successful.”

Following the move, Resolution Insurance will not be able to partake in any insurance business, and all existing policies at the firm will cease to be active effective Tuesday.