DIRECTLINE INSURANCE LTD; To Buy their Products or not?

On so many occasions while relaxing in the house, though I'm not a TV fan, I've watched an advert or rather cautionary message sponsored by Royal Credit Ltd cautioning the public against buying insurance policies underwritten by Directline Assurance Ltd and the message is backed by justifications, which to me that's sufficient caveat.

I have some little prior knowledge of wrangles in the company, and I remember hearing that the company was being closed down and due this the cautionary Ad’s message never bothered me a lot until yesterday, I heard an advert of Directline Insurance in a certain vernacular radio station. In the advert, the company's 'good' past records in paying claims and ability of doing so currently is emphasized and urging clients to buy their insurance covers. In fact, the Ads tagline is "Noma achia Directline".

From where I sit, this is not the usual business rivalry where competitors outsell each other. This is a situation of outright misinformation to the consumer. For obvious reasons, the two conflicting messages wouldn't be run in the same media outlets and so unless one gets a chance to listen to both and rationally make a decision, one is likely to make wrong choice on wrong information.

Insurance matters are sensitive and a consumer will purchase a cover with confidence that when the unfortunate happens, there will be someone to help them in liabilities to third parties or to self. Needless to say, gambling with such security is immoral, very unfortunate and illegal.

Royal Credit Ltd and the other directors of Directline Assurance Ltd are private entities and just like any other business, their core business is to make profits and reduce if not avoid costs. In fact, the other shareholders of the company have sued SK Macharia, the Director of Royal Credit Ltd over the cautionary message. Going by this rationale, each is paying for the advert for their own benefit and this raises pertinent questions- Is Directline Insurance in genuine business or not? What is the true position of the company's liquidity? Are the current policy holders especially motor (so many PSVs included) covered in case of arising liabilities? Can one buy a policy cover from Directline Insurance and will it be recognized by the traffic police, NTSA or the courts if subjected to scrutiny?

Ideally, anyone who watched the caveat alert wouldn't purchase a cover from Directline Insurance. But what happens to that person not aware of the message and yet walks into a Directline Insurance office (licensed and legally operating) and purchases a cover? With the obvious myriad risks the situation portrays, one is tempted to ask? Isn't the industry regulated? Insurance Regulatory Authority (IRA) is in existence to regulate operations of all insurers and brokers in the country. IRA’s CEO has announced that Directline Assurance Company Ltd is legally existing and holds it fully liable for claims emanating from its policies. This then sharply contradicts the cautionary message by Royal Credit Ltd who term themselves as the Majority shareholders of Directline Assurance Ltd. As we ponder about this regulator/regulated feud, we invite Competition Authority of Kenya’s (CAK) feedback. Established by the Consumer Protection Act 2012, CAK has the role and mandate to protect the consumer from misleading and false information amongst other illegalities by businesses. There is a department in the authority whose role is such investigations and take necessary action.

Whether CAK has received complaints from consumers or not, they ought to pick up the Directline Insurance operations debacle, engage the various parties involved and accurately and reliably advise the consumers on validity of the company's services. When businesses with own interests to protect conflict, a neutral guardian angel with interests of the public should pronounce itself, objectively advise the consumers and protect their rights.

As of now CAK should issue a statement if not addressing all other issues, advise the current policy holder and any other potential consumer whether services and products of Directline Insurance are genuine or not. It should further give a legal recourse of any consumer who would be affected in one way or the other as a result of the conflict between the business persons. We'll be keen to see the end result of the dispute between Royal Credit Ltd and the other Shareholders in regards to Directline Insurance. We hope there will be no consumers losing after the dust settles.