The Policyholders Compensation Fund (PCF) is seeking public input on how to raise the compensation limit for insurance policyholders whose insurers go under. It views the current payout ceiling as inadequate.
Currently, compensation is capped at KES250,000 ($1,930), a figure many industry players argue is too low, particularly for claimants whose policies are worth millions of shillings, reported the newspaper, The Standard.
Speaking at the Fund’s 20th anniversary celebrations and the inaugural Africa Insurance Resolution Conference recently, PCF chairman Simon Mbugua said, “We’re currently reviewing the figures with the intention of increasing the payout as contributions to the fund grow.”
Insurance Regulatory Authority (IRA) chief executive Godfrey Kiptum echoed these sentiments, adding that the current cap does not reflect the sum insured by most insurance policies.
If the proposals are adopted, insurance firms could be required to contribute more than the current 0.5% of premiums to the Fund.
This move aims to strengthen the financial safety net for policyholders and guarantee compensation in cases where insurers go under and their operating licences are cancelled.
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