nsurance companies holding unclaimed funds risk losing their licences in a new raft of measures announced on Thursday by the industry watchdog.
While only 10 insurance companies surrendered Sh533 million before the November 1 deadline, the other 39 insurers never heeded the ultimatum by the Unclaimed Financial Assets Authority (Ufaa), opening themselves to harsh penalties that could even see the company bosses sued.
Insurance Regulatory Authority chief executive Sammy Makove vowed to enforce the law, saying cover providers holding unclaimed funds were giving the industry a bad name.
He said no licence for 2016 would be renewed before the Ufaa grants the insurance companies a clearance certificate.
Mr Makove and Ufaa boss Kellen Kariuki spoke when they signed a memorandum of understanding that will see them form a joint audit team to scrutinise all accounts of insurance companies seeking renewal of their licences.
“We believe the insurance companies are holding billions of shillings in unclaimed amounts accruing from mature life policies that are yet to be claimed. We shall ensure all their books are subjected to a thorough audit before we ask why no one bothered to comply with our deadline,” said Mrs Kariuki.
Mr Makove described compliance as a patriotic duty, saying Kenyans need to benefit from money set aside for them by their parents, adding that the same must be released together with the interest accrued.
Ufaa added that it had received money from the fallen Kenya National Assurance Company and urged families of policyholders, who had died, and those who are still alive, to file their claims for payment.
The Ufaa executive said that the authority was in talks with the Law Society of Kenya to have all lawyers brought under the unclaimed assets net since some lawyers are still holding clients’ funds in joint accounts. The money could have arisen from payment of an accident claims or debts.
At the same time, Ms Kariuki added that while mobile money providers had surrendered a paltry Sh303 million, with Safaricom wiring Sh182 million, its officers would visit all telcos to verify the accounts.
“We have agreed to cooperate and deepen supervision of all insurance companies, some of which have been in operation for over a century. The amount declared by insurance companies is a drop in the ocean,” said Ufaa.
Mr Makove added that all insurance companies had a duty to comply with the law, to enable the intended beneficiaries to receive the funds.
SH200 MILLION SURRENDERED
Ufaa said Sh200 million had been surrendered to them after the November 1 deadline, with banks leading the way with a total of Sh3.3 billion, stockbrokers Sh875.2 million and phone companies that run mobile money-based platforms Sh303 million. Pension fund schemes handed in a paltry Sh22 million, saccos Sh3 million, while other firms dished out Sh70 million.
A similar MoU has since been signed with the Capital Markets Authority to facilitate supervision of all listed companies for compliance on unclaimed financial assets reporting and surrender.