Thousands of former policyholders and creditors of United Insurance Company Limited are set to receive long-awaited compensation, bringing renewed hope to individuals and businesses that have waited more than two decades for their claims to be settled.
The development marks a significant milestone in the winding-up of the insurer, whose financial difficulties and subsequent collapse left thousands of claimants caught in a lengthy legal process.
In a notice to the media, court-appointed liquidator Kamal Anantroy Bhatt said cheques would be issued to all verified claimants whose applications had been examined by the claims verification committee and ratified by the liquidation committee.
The exercise will be conducted under the supervision of a High Court judge, providing judicial oversight during the final verification and disbursement process.
For many beneficiaries, the payments represent more than financial compensation. They offer an opportunity to finally close a chapter that has been marked by years of uncertainty, delayed settlements and prolonged legal proceedings.
The beneficiaries include former policyholders, road accident victims, former employees, legal practitioners, medical service providers and other creditors who have been waiting for the insurer to meet its outstanding obligations.
More than Sh118 million cleared for payment
The compensation exercise follows progress in the verification of claims lodged against the collapsed insurer.
Court proceedings in July 2026 revealed that claims worth approximately Sh118 million had been cleared by the verification committee for payment, out of an estimated Sh300 million in verified creditor claims.
More than 4,000 claims had reportedly undergone verification, although approximately 1,600 payment applications lacked claim numbers, complicating the reconciliation process.
The verification exercise is intended to establish legitimate claims and ensure that payments are directed to eligible beneficiaries.
Although the exact amount to be distributed was not immediately disclosed, the latest development signals progress towards resolving outstanding obligations and concluding a liquidation process that has stretched over many years.
A long road towards justice
United Insurance was placed under statutory management by the Insurance Regulatory Authority (IRA) on July 15, 2005, following concerns over its financial position and ability to meet obligations to policyholders.
Court records indicated that the insurer had assets valued at approximately Sh475 million against liabilities of Sh2.25 billion, leaving a deficit of about Sh1.78 billion.
Its cash holdings in banks and on hand stood at approximately Sh110 million, while its asset ratio was 0.3:1 against the statutory requirement of 1:1.
The regulator also cited concerns including unsecured loans to directors, failure to meet tax obligations, poor accounting records and breaches of statutory investment requirements.
In 2006, the Commissioner of Insurance filed a winding-up petition, setting off a prolonged legal battle involving the regulator, shareholders and policyholders.
Shareholders opposed the liquidation, arguing that the company could be revived through the disposal of some of its properties and additional capital injections. They also disputed assessments of the company’s insolvency.
However, the dispute eventually reached a turning point on July 12, 2024, when Justice Alfred Mabeya ordered the liquidation of the company and appointed Bhatt as its liquidator.
The court criticised the prolonged litigation, observing that the process had exposed claimants to years of uncertainty despite legal provisions requiring timely settlement of insurance claims.
Renewed hope for insurance claimants
The latest compensation development highlights the importance of accountability and timely resolution of claims in the insurance sector.
For individuals who had been unable to recover money owed to them, the planned disbursement offers a measure of financial relief and renewed confidence that outstanding obligations can eventually be addressed through established legal processes.
The court-supervised exercise is also expected to provide an additional layer of accountability in the handling of the company’s remaining assets and the distribution of funds to verified creditors.
While the compensation process may not resolve every outstanding claim immediately, it represents an important step towards bringing closure to one of Kenya’s longest-running insurance liquidation cases.
After 21 years of waiting, thousands of claimants now have renewed hope of receiving money they have long been owed.
