High Court suspends 50pc rise in car insurance

By SAM KIPLAGAT
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Summary

• Justice James Makau said in a ruling that the case by Kenya Human Rights Commission has chances of success, owing to the issues raised in the petition. 
• The Judge also issued an order suspending a decision by insurance firms not to offer comprehensive insurance cover for motor vehicles that are older than 12 years or with a value of less than Sh600,000.

The High Court has suspended the planned increase of motor vehicle insurance premiums by up to 50 percent.

Justice James Makau said in a ruling that the case by Kenya Human Rights Commission has chances of success, owing to the issues raised in the petition. 

The Judge also issued an order suspending a decision by insurance firms not to offer comprehensive insurance cover for motor vehicles that are older than 12 years or with a value of less than Sh600,000.

“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 Insurance Regulatory Authority (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

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. 

He submitted that considering the mandatory nature of motor-vehicle insurance, the planned increase is discriminatory, unjustified and illegal. “The said actions also amount to a violation of consumer rights and are punitive, insensitive and oppressive,” he said.

The court directed the case to be mentioned on February 14 and ordered IRA and the Association of Kenya Insurers (AKI) to file their responses within three weeks.