The future of Directline Assurance Company, which commands a substantial portion of Kenya's Public Service Vehicles (PSVs) insurance market, has been cast into doubt following a series of conflicting statements regarding its operations and management.

In a surprising turn of events, SK Macharia, Chairperson of Royal Credit Limited—the parent company of Directline—announced the termination of all Directline employees and the dissolution of its Board of Directors.

According to Macharia, Royal Credit Limited will assume control of all Directline assets.

He attributed the abrupt closure to the Insurance Regulatory Authority (IRA) freezing Directline's bank accounts.

Macharia also criticised the IRA for not taking action against the company's former directors, who he claimed mismanaged Sh7 billion.

In response to these announcements, the IRA released an official press statement asserting the continuation of Directline's operations and dismissing Royal Credit Limited's actions as illegitimate.

The IRA emphasised its exclusive authority over the regulation and administration of insurance companies in Kenya.

"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," the IRA's statement read. "The purported transfer of the assets of the insurer to any third party is therefore null and void ab initio."

The IRA assured policyholders that their contracts with Directline remain valid and that the company retains liability for all claims.

"All policies issued by Directline Assurance Company Limited remain in full force and effect and the insurer remains liable for any claims arising therefrom," the Authority affirmed.

Moreover, the IRA disclosed that Directline had been placed under "heightened surveillance" to safeguard the interests of policyholders and ensure the company's stability.

The Authority reiterated its commitment to taking "necessary steps as may be appropriate, pursuant to the provisions of the Insurance Act, CAP 487 Laws of Kenya."

This development has thrown the transport industry into confusion, given Directline's prominence as the leading motor vehicle insurance provider in Kenya since its establishment in November 2005.

The sudden and conflicting announcements have left stakeholders seeking clarity on the actual status of the insurer and the security of their insurance policies.

As the situation unfolds, the insurance sector and policyholders are closely monitoring the actions of both Royal Credit Limited and the IRA to determine the future trajectory of Directline Assurance Company.