Bus companies linked to aiding terrorism stripped of insurance

In Summary

• Insurance companies were ordered to terminate covers for the 86 individuals and institutions cited for facilitating terror attacks.
• Reporting institutions are also required to take action in accordance with the terrorism and the anti-money laundering laws, Mr Makove added.
• “For bus companies, this means that they cease to operate as they cannot be on the road without valid insurance covers,” said the regulator.

Insurance for bus companies associated with entities suspected of funding terrorism has been terminated.

This follows the government’s naming on Wednesday of 86 entities, including individuals, accused of aiding terror attacks in Kenya. 

The Insurance Regulatory Authority (IRA) said the conduct of insurance business is subject to anti-money laundering and counter terrorism laws.

Insurance companies were ordered to terminate covers for the 86 individuals and institutions cited for facilitating terror attacks.

“Your attention is drawn to ... Regulation 11(3) of Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Suppression of Terrorism) Regulations 2013, which requires reporting institutions to take appropriate action by amongst others, freezing until further notice, the property or funds of designated persons,” said IRA chief executive Sammy Makove. 

Reporting institutions are also required to take action in accordance with the terrorism and the anti-money laundering laws, Mr Makove added.

The government ordered the 86 entities to cease business until investigations are conducted and they are cleared of abetting or facilitating terrorism. 

The action followed a terror attack at Garissa University College, where 148 people were killed. 

EXPOSED

“For bus companies, this means that they cease to operate as they cannot be on the road without valid insurance covers,” said the regulator.

This exposes the transport firms to the risks they had taken cover for. 

“For others, their premiums are withheld and they are off cover, leaving them exposed. They can not get any claims arising from their policies,” said the office.

The measure is also bound to affect the insurance agents who had sold the insurance covers because they are paid a commission once the premium is paid.

The regulator said that the Financial Reporting Centre had been designated by the counter financing of terrorism inter-ministerial committee as the agency responsible for circulation of the domestic list to supervisory entities specified under the law.