Regulator loses first round in insurance case

• Transporters claim industry watchdog does not have power to fix prices and fees for players

A judge has suspended the new guidelines on motor vehicle risk insurance.

Mr Justice Jackton Ojwang’  quashed the move by the Insurance Regulatory Authority (IRA) after transporters claimed the rules went against the Insurance Act.

Officials of the Kenya Transporters Association also claimed the new rules were illegal since they amounted to price-fixing.

According to them, the new rules were contrary to the Restrictive Trade Practices Monopolies and Price Control Act.

The applicants alleged that the introduction of the regulations had pushed up insurance premiums.

The judge granted the application for an order restraining the authority from enforcing the 2009 Motor Underwriting Guidelines.

The guidelines took effect on March 1, and apply to insurance and re-insurance companies.

The transporters claim the guidelines were therefore a nullity since the authority acted beyond its mandate by implementing the rules.

The authority had said it reviewed the guidelines to reflect the specific risk exposure faced by the underwriters.

However, KTA argued IRA was not mandated to fix or prescribe fees, charges or premiums to be levied by insurance companies.

The judge directed the application for judicial review be filed and served within 21 days, and stayed the enforcement of the rules until the application was heard and determined.