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The High Court has suspended the planned increase of motor vehicle insurance premiums by up to 50 per cent as recommended by the Insurance Regulatory Authority (IRA), pending the determination of a petition by the Kenya Human Rights Commission (KHRC).
Justice James Makau suspended the planned implementation of the insurance premiums hike saying in a ruling that the case by KHRC has chances of success, owing to the issues raised in the petition.
According to BUSINESS DAILY, the judge issued an additional order suspending a decision by insurance firms not to offer comprehensive insurance cover for motor vehicles that are older than 12 years or those valued under Sh 600,000. The case will be mentioned on February 14.
“I have considered the petitioners’ grounds in support of the application and oral submissions by both parties upon careful evaluation of the same, I find that the petitioner has demonstrated a prima facie case with a likelihood of success,” the Judge said.
The lobby group rushed to court last week accusing IRA of failing to protect the public and policyholders from such an increase.
Lawyer Kelly Malenya for KHRC told the court that a number of insurance companies have announced an increase of up to 50 per cent of premiums for motor-vehicle comprehensive cover from January, a move that is illegal because there was no public participation.
He further said some of the underwriters have announced that they will not offer a comprehensive insurance cover for motor vehicles that are older than 12 years or with a value of less than Sh600,000.
The judge said failing to suspend the planned increase was likely to prejudice the public, whereas the underwriters would not suffer if the order is granted. He also joined the Consumers Federation of Kenya (Cofek) as an interested party in the case.
