Resolution Insurance has entered the liquidation phase after nearly 21 months of trying to rescue the company failed to bear fruit.
The High Court has appointed Long’et Terer as the interim liquidator of the cash-strapped insurer that was incorporated in 2002 as Resolution Health before renaming it to Resolution Insurance in 2013.
The liquidator was gazetted last Friday to start the process of taking stock of all the people the insurer owes with the purpose of settling their dues, depending on what will be raised from the sale of the insurer’s assets or collection of any debts owed to it.
“The creditors are required to send full particulars of their claims against the company to the interim liquidator, or in default thereof, they may be excluded from the benefit of any distribution made before such debts are proved,” said Mr Terer in a gazette notice.
Resolution joins Concord Insurance Company Limited and Standard Assurance Kenya Limited in liquidation. Xplico Insurance, another struggling insurer, has twice been sent into liquidation but rescued by the court.
Resolution has been under statutory management since April 5, 2022. The Policyholders Compensation Fund (PCF) took over the firm as the statutory manager and got an extension of its duties on October 5 last year to January 4.
The statutory management status had put a moratorium on policyholders and creditors who are owed money by the cash-strapped insurer to seek their dues. This has now been lifted but their dues are now tied to what will be realised from the liquidation.
The insurer has struggled to pull out of the woes that saw it go into statutory management with more than Sh6.5 billion in client cash, insurance claims and creditor funds.
Hopes of reviving the insurer have been fading, with the statutory manager last June saying at least Sh3.6 billion was required to bring the firm back to solvency.
Documents filed in court by PCF, then the statutory manager of the collapsed insurance company, had shown shareholders of the firm would have been required to inject the amount, which includes the Sh600 million minimum capital requirement for an insurer to transact general insurance business.
PCIF had, after analysing the viability option of the insurer and the inadequacy of the shareholders’ revival proposal, recommended liquidation of the company.
Resolution was placed under statutory management on the back of numerous challenges, particularly relating to struggles in settling claims to the detriment of claimants, policyholders and other creditors.
The insurer was also not able to comply with statutory requirements relating to capital adequacy, submission of returns and governance structures, according to the Insurance Regulatory Authority.
