Govt Revokes Closure Of SK Macharia's Directline Assurance
IRA Chief Executive Officer and Commissioner of Insurance, Godfrey Kiptum, noted that it took note of communication released by Dr S. K. Macharia through Royal Credit Limited regarding the operations of the insurer
Marvin Chege 
The Insurance Regulatory Authority (IRA) has revoked the closure of Kenyan insurance giant Directline Assurance, which holds the lion's share of the motor commercial Public Service Vehicle (PSV) market.
In a statement on Tuesday, June 11, IRA Chief Executive Officer and Commissioner of Insurance, Godfrey Kiptum, noted that it took note of communication released by Dr S. K. Macharia through Royal Credit Limited regarding the operations of the insurer.
"The purported actions are null and devoid of any legal effect and as such the insurer continues in full operation as licensed and approved by the Authority," read the statement in part.
"The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio."
The Insurance Regulatory Authority signage. /IRA
Furthermore, all policies issued by Directline Assurance Company Limited remain in full force and effect and the insurer remains liable for any claims arising therefrom.
All policyholders of the insurer were thus directed to continue with their operations in accordance with their insurance contracts.
"The Authority has the sole statutory mandate to approve, suspend or cancel the operations of any insurance company in Kenya and this duty cannot be usurped by any unauthorized party.
"The insurer has been placed under heightened surveillance by the Authority and the Authority will take necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya, to ensure sustainability of the insurer and protection of insurance policyholders’ interests," IRA added.
Macharia's earlier move to shut down the insurance firm put hundreds of jobs on the line as all employees were terminated with immediate effect and the board of directors was dissolved.
The company also announced that it would cease issuing insurance, a move that threatened to ignite a crisis in the country's matatu industry given that it is heavily depended on by Kenyan matatus.
Macharia in a statement had attributed the shutdown to the closure of all the bank accounts belonging to Directline by IRA. However, he accused the IRA of failing to take action against former Directline directors whom he claimed misused Ksh7 billion of company funds.
Directline's troubles began in 2019 when S.K. Macharia declared himself chairman and director, prompting the IRA to caution him and other shareholders to stop any physical involvement in the operations of the company immediately.
Macharia took over operations, claiming Royal Media Services (RMS), Royal Credit Limited, himself, his wife Purity Macharia, and the estate of the late Dan Karobia were the majority shareholders.
He appealed a court decision in 2023 that restricted his involvement in company management. However, the court revealed that Macharia only held a 9.6 percent stake through RMS, while 90 percent belonged to his late son, John Gichia Macharia.
