The Policyholders Compensation Fund (PCF)
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    Compensation

    The Fund covers claims arising from all insurance policies issued in Kenya. However, the following exceptions hold:

    1. a policy of re-insurance

    2. a superannuation scheme;

    3. Claims arising from policies issued before the Fund commenced its operations.

    The Funds Board of Trustees shall, in consultation with the Minister, determine from time to time, the amount payable as compensation for different classes of insurance policies and thereafter pay such compensation to the policyholder or their beneficiary as soon as is reasonably practicable after a claim is made.

    A policyholder who is eligible for compensation may make a claim for compensation in the prescribed form and shall submit the form to the Managing Trustee.

     

    The claim form submitted shall be accompanied by such other documents in support of the claim as the Board may require. In making a claim for compensation, a policyholder shall—

     

    1. 1. observe utmost good faith by making a full and honest disclosure, to the Board, of all material facts relating to his claim; and
    2. 2. provide any other information, whether on oath or otherwise, as may be required by the Board.

    The Board may reject a claim and decline to pay any compensation of a policyholder who fails to comply with paragraphs (1), (2) or (3).

    1. 1. When an authorised insurance company that issued a Kenyan policy or policies has become insolvent.

      For purposes of these Regulations, an authorised insurance company shall be considered to be insolvent if:
      a. It is wound up by the Court under section 219 of the Companies Act;
      b. It does not meet the solvency requirements prescribed in section 41 of the Act;
      c. In the case of an insurance company carrying on general business, where a resolution for voluntary winding up is made in a meeting of creditors under section 286 of the Companies Act; or
      d. It is wound up by the court at the instance of the Commissioner of Insurance under section 123 of the Act.


    2. 2. The right of any policyholder to compensation shall be subject to compliance with any conditions imposed by the Board, including:
      a. Any rights a policyholder may have in respect of any payments made by the policyholder to the insolvent insurance company as premiums, under the policy, after the insolvency; or
      b. Any rights a policyholder may have against any other person in respect of any event giving rise to any liability of the company under the relevant policy.


    3. 3. Any payment made by any person (other than the Board) to the policyholder, being a payment related to any liability of an insolvent company to the policyholder, may, if the Board so decides, be considered as payment, in whole or in part, of the compensation payable to the policyholder under the Act and these Regulations.

    1. The Board shall not provide compensation under its regulations in the following circumstances: 

     

    1. a) Where the petition for the winding up of the insurance company by the court was presented before the 1st January, 2005;
    2. b) whether or not the Court has made an order for the winding-up of the company after the resolution was passed, if the resolution was passed before the 1st January, 2005.

    2. Where a claim for compensation is made after two years from the date of insolvency of an authorised insurance company.

     

    1. a) Where the liability of the insolvent insurance company to the policyholder is duplicated by the liability of any other authorised insurance company which is not, for the purposes of these Regulations, insolvent.
    2. b) For purposes of paragraph (i), the liability of an authorised insurance company towards a policyholder is duplicated by the liability of another authorised insurance company if the other company also has the liability, under the terms of any other Kenyan policy which on the date of the insolvency of the first company, to pay the policyholder in respect of the matter to which the liability of the first company relates.

    3. Where the Commissioner of Insurance has, pursuant to section 67C (2) of the Act, appointed a manager to assume the management, control and conduct of the affairs and business of an authorised insurance company which becomes insolvent thereafter, unless the claim relates to the liability of the said company arising out of an incident or event occurring before the date of appointment of the manager.