The government has launched a nationwide crackdown on rogue insurance companies accused of exploiting Public Service Vehicle (PSV) operators. The move, spearheaded by the Insurance Regulatory Authority (IRA), aims to restore order, transparency, and accountability in Kenya’s insurance sector.
Appearing before the National Assembly Public Petitions Committee, IRA Chief Executive Officer Godfrey Kiptum confirmed that the regulator had identified several non-compliant insurers and would soon take decisive regulatory action. The inquiry followed a petition by Machakos MP Caleb Mule, who accused the IRA of failing to protect PSV owners from exploitative practices by insurance providers.
Committee Chairperson and Turbo MP Janet Sitienei questioned why insurers were still permitted to collect premiums from matatu owners despite their repeated failure to settle legitimate claims. In response, Kiptum revealed that only three companies are currently licensed to transact PSV insurance in Kenya, noting that the sector is considered high-risk, making it challenging for insurers to maintain sustainable premium rates.
PSV insurance typically covers third-party liabilities such as death, permanent disability, and medical expenses arising from road accidents. However, the cover does not include damages to the vehicle itself or the owner’s property.
Kiptum admitted that the IRA had received numerous complaints from PSV operators regarding delayed or denied claims. To address the issue, the Authority pledged to strengthen oversight mechanisms, including placing errant insurers under statutory management and appointing independent directors to ensure compliance with the Insurance Act.
He further revealed that the IRA, in partnership with the Insurance Fraud Investigations Unit and the Office of the Director of Public Prosecutions, had initiated prosecutions against culpable directors and officers. Those convicted risk fines of up to Ksh5 million or imprisonment for up to two years.
During the same session, the Federation of Public Transport Sector (FPTS) Chairperson Kushian Muchiri urged reforms in handling personal injury claims, proposing integration with the Small Claims Court framework to expedite justice and ease financial strain on victims and insurers alike.
