AAR Insurance Kenya suspends City Hall account over Sh259m debt

AAR had written to Nairobi County secretary on April 29 to pay on or before May 7, failure to which it would suspend the account.

This is the second time the firm is suspending services this year after a similar move in March. Kenya County Government Workers Union Nairobi branch secretary Festus Ngari said services were stopped last Friday.

“City Hall sought a 10-day extension to clear the outstanding premium, which elapsed on May 7. Sadly, they didn’t honour the deal. Are they waiting for more staff to die to take the matter seriously? People are being turned away from hospitals because of the mistakes of the county government,” said Mr Ngari.

AAR Insurance Managing Director Nixon Shigoli confirmed to Nation.Africa that provision of services to City Hall staff had been suspended.

“They have to pay in cash since we are yet to be paid full premiums to allow services with our service providers. Staff will have to pay cash and seek reimbursement once premium is paid,” said Mr Shigoli.

The city county government had committed, through a letter on April 15, to clear the outstanding premium after making a partial payment of Sh270.1 million.

“We remain committed to meeting the contractual obligations between us and look forward to your timely payment of the premium balance of Sh259.9 million on or before May 7, 2021 as per your commitment without which the scheme will revert back to cash basis,” the letter stated.

Trouble began in February when AAR wrote to City Hall over a Sh530 million balance. On March 19, the insurer suspended services after the county government failed to address the matter. City Hall staff then threatened to down their tools.  

At the time, Nairobi Finance Executive Allan Igambi pledged to clear the arrears by April 23 but later sought for an extension until May 7.

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