The High Court has suspended the proposed 50% increase in car insurance premiums and the downgrading insurance of certain categories of motor vehicles from their comprehensive cover. The suspension follows a filed petition by the Kenya Human Rights Commission (KHRC) last week, where the lobby group accused the Insurance Regulatory Authority (IRA) of failing to protect the public and policyholders from such an increase.
In his ruling, Justice James Makau of the High Court stated that the orders will be in effect until the hearing and determination of the petition by the human rights body. “The court also held that our petition can proceed, the matter is due for mention on April 14 2022. All respondents have been issued with 21 days to file & serve their responses to the petition,” said KHRC in a tweet on their official page.
KHRC argued that the planned increase of premiums was illegal because there was no public participation. This is after insurance companies at beginning of this month effected a directive by the industry regulator, IRA, increasing insurance cover by up to 50%. The providers had also indicated that they will no longer offer comprehensive cover for cars aged more than 12 years or those with a value of Ksh. 600,000 and below.
The sharp increase in insurance premiums has been attributed to the challenging economic environment posed by the COVID-19 pandemic. Whereby a majority of insurance companies reported losses with only a few announcing profits, including Jubilee Insurance, CIC Insurance, Britam and UAP Group.