A member of the Matatu Owners Association (MOA) drawn from the Central Kenya region, Mr. Wambugu Kanoru, said their vehicles are being auctioned at throwaway prices due to ballooning insurance claims. He appealed to National Treasury Cabinet Secretary John Mbadi to address the matter urgently, failing which they will take action. He did not immediately specify the action that they would take henceforth.
By The Weekly Vision Team
The Matatu Owners Association (MOA) has raised red flags over the collapse of insurance firms in the country, claiming that some of its members have been sent to prison and others auctioned for being unable to pay hefty insurance claims. Matatu owners drawn from the Central Kenya region convened at a Nyeri town hotel last week, where they blamed the judiciary, the Kenya Auctioneers Licensing Board, and the National Police Service for their woes. MOA Central Kenya regional chairman Michael Muchiri said they are planning to come up with a mutual insurance company specifically for the matatu industry.
Muchiri said the sector’s leadership has been engaging the National Treasury and other stakeholders to solve the matter since December 2023, but their members have continued suffering. “We are contemplating forming a mutual insurance company that will cater for our industry. This will be the only solution to our problems, and it is doable. We are at the stage of conducting a feasibility study so as to come up with that company. Alternatively, we appeal to our MPs to make necessary amendments to the law so that this sector operates seamlessly,” Muchiri said.
“If all insurance companies are closed or put on statutory management, it simply means that the PSV sector will collapse and we will suffer as a country. The insurance companies do not collapse because there is no money in the industry. It is because of mismanagement and payment of fraudulent claims,” he added.
Muchiri said they have been injecting their premiums into insurance firms, which end up failing to pay their claims after their closure. “As we speak, the majority of our members are serving jail terms while others have their vehicles auctioned. I want to categorically state that many players have been involved in derailing payment of these claims. We believe that the police, lawyers, auctioneers, and courts have fuelled this problem that has led to our suffering,” Muchiri said.
Wambugu Kanoru, a member of MOA, said their multi-million-shilling vehicles are being auctioned at throwaway prices due to ballooning insurance claims. Kanoru appealed to National Treasury Cabinet Secretary John Mbadi to address the matter urgently, failure to which they will take action. He did not immediately specify the action that they would take henceforth.
“For instance, one pays and acquires an insurance policy today, then hours later, you realise that the insurance firm has been closed down without even you being notified. In such a scenario, the Policyholders Compensation Fund (PCF) pays Ksh 250,000 only; PCF is a state corporation under the National Treasury. If the claim is worth Sh2 million, then that operator ends up paying the rest. That is where the auctioneers come in and render us poor completely,” he said. MOA Laikipia chairman Mwaniki Wagichere appealed to Chief Justice Martha Koome to investigate the matter and end their suffering.
“We are urging Chief Justice Martha Koome to look into this issue and ensure that we do not continue incurring punitive fines in courts. The government has been so keen on addressing issues affecting other industries that are driving the economy of this nation. It should also look into our industry, which employs many Kenyans,” Wagichere said.
On August 14, 2024, Invesco Assurance Company Limited was placed under statutory management by the Commissioner of Insurance. Policyholders Compensation Fund (PCF) was appointed as the statutory manager.
