Royal Credit Limited has issued a strong statement urging the Insurance Regulatory Authority (IRA) to take immediate action to address alleged irregularities in the shareholding structure of Directline Assurance. The company has accused the regulator of failing to act on these issues for over a decade and has called for the matter to be rectified or for the IRA to step aside and allow the Ethics and Anti-Corruption Commission (EACC) to investigate.
The conflict comes after a statement released by IRA earlier this week, which Royal Credit says misrepresented its role and the extent of the issues surrounding Directline’s shareholding structure. Royal Credit’s position is clear: IRA must either correct the discrepancies or allow the relevant authorities to take over the investigation, emphasizing that the situation has gone on for too long without resolution.
According to Royal Credit, IRA has allowed serious violations of key provisions of the Insurance Act since 2012, failing to take decisive steps to address the growing concerns. The company points to multiple investigations that have taken place over the years, including a joint inquiry conducted by IRA and the Business Registration Service (BRS), which highlighted significant issues in Directline’s corporate structure. Despite these investigations, Royal Credit alleges that the regulator has neglected its responsibility to ensure compliance with the law and rectify the discrepancies in Directline’s shareholding.
At the heart of the issue is Directline’s shareholding structure, which Royal Credit claims has been the subject of numerous investigations. The company argues that IRA is well aware of the problem, as the shareholding structure has been under scrutiny for years. Despite this, no action has been taken to amend or correct the situation. Royal Credit asserts that IRA’s failure to address the issue is not only a violation of its regulatory duties but also jeopardizes the financial stability of policyholders by putting their funds at risk.
Royal Credit is also concerned about the integrity of Directline’s ownership records, particularly the CR12 document, which lists the company’s shareholders. The company argues that the current version of the CR12 is inaccurate and needs to be corrected to reflect the true ownership structure. In light of these concerns, Royal Credit is calling on IRA to take the necessary steps to ensure that the shareholding details are accurate. The company insists that IRA must write to BRS, requesting that the CR12 document be amended to accurately reflect the shareholding structure of Directline.
In addition to urging IRA to take corrective action, Royal Credit has suggested that the Ethics and Anti-Corruption Commission (EACC) should be brought in if IRA is unwilling or unable to act. The company believes that EACC’s involvement would ensure a thorough investigation and potentially hold those responsible for any irregularities accountable. By raising this possibility, Royal Credit is putting pressure on IRA to act swiftly and decisively to prevent further delays and potential financial risks to policyholders.
The situation underscores the broader concerns regarding governance and regulatory oversight in Kenya’s insurance industry. The role of regulators like IRA is crucial in maintaining trust and transparency in the sector, ensuring that companies operate within the confines of the law, and protecting policyholders’ interests. When regulators fail to act, as Royal Credit claims in this case, it undermines public confidence in the industry and raises questions about the efficacy of the regulatory framework.
As the debate continues, the focus remains on how IRA will respond to Royal Credit’s calls for action. Whether the regulator will take the necessary steps to address the irregularities in Directline’s shareholding or defer responsibility to EACC remains to be seen. What is clear, however, is that this issue highlights the need for strong and timely regulatory oversight to safeguard both the integrity of the insurance sector and the interests of the public.
