Court refuses to suspend 50% increase in auto insurance

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Court refuses to suspend 50% increase in auto insurance


Judge Anthony Mrima. PHOTO FILE | NMG

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Summary

  • The High Court refused to stay the planned increase in auto insurance premiums by up to 50 percent.
  • Judge Anthony Mrima, instead of certifying the case filed by the Kenya Human Rights Commission (KHRC) as urgent, ordered the parties to come forward for instructions next week.
  • KHRC argues that the planned increase in bonuses is illegal because there has been no public participation.

The High Court refused to stay the planned increase in auto insurance premiums by up to 50 percent.

Rather, Judge Anthony Mrima certified that the case filed by the Kenya Human Rights Commission (KHRC) was urgent and ordered the parties to come forward for directions next week.

KHRC argues that the planned increase in bonuses is illegal because there has been no public participation.

The lobby group further accused the Insurance Regulatory Authority (IRA) of failing to protect the public and policyholders against such an increase.

KHRC attorney Kelly Malenya told Judge Mrima that a number of insurance companies announced premium increases of up to 50 percent in January for full motor vehicle coverage.

He further stated that some of the insurers had announced that they would not offer full insurance coverage for motor vehicles over 12 years old or worth less than 600,000 shillings.

He argues that given the compulsory nature of automobile insurance, the planned increase is discriminatory, unjustified and illegal. “Said actions also violate consumer rights and are punitive, callous and oppressive,” he said.

The committee is asking for a declaration that increasing premiums without public participation is illegal, null and void. Mr Malenya said premiums for full coverage are normally calculated using a defined formula, which is 4 percent of the value of the motor vehicle.


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