This archive report was first published on 6 January 2022.
January 6, 2022, marked the beginning of a new era for motor vehicle insurance in Kenya, with insurance firms notifying their customers and business partners of higher insurance rates. However, not everyone is pleased with the new development.
The Kenya Human Rights Commission (KHRC) has sued the Insurance Regulatory Authority (IRA) and the Association of Kenya Insurers, accusing them of acting illegally in sanctioning the increase of premiums and locking out those with vehicles that are 12 years or older from comprehensive cover.
According to KHRC, the new move is discriminatory, punitive, and goes against consumer rights to access services at a reasonable cost. The lobby argues that the increase in premiums without consultations and justification violates the rights of consumers, and that excluding a specific category of vehicles from comprehensive insurance cover without justification equally violates the rights of consumers.
“Considering the mandatory nature of motor vehicle insurance, then the said service has to be offered in a manner that protects consumers’ health, safety, and economic interests,” says KHRC lawyer Kelly Malenya in court papers.
Insurers expect the higher premiums to cushion them against losses in the motor insurance segment, which has perennially been a loss-making venture. However, KHRC argues that the financial burden cannot be passed on to the consumer and without public participation.
“Most of the insurance companies have attributed the increase of premiums to a surge of claims, some of which are fraudulent. This is not a reason to increase the premiums considering that the law provides safeguards, which allows insurance companies to repudiate claims that are not genuine,” argues KHRC.
The lobby wants the court to suspend the new charges and direct insurers to continue issuing comprehensive covers to all motorists.
