Kenya Reinsurance Corporation (Kenya Re) has been flagged for continuing to pay managing director Hillary Wachinga his full salary during a suspension period, in what the Auditor-General says breached public service rules.
Dr Wachinga was suspended for two months – from September 2 to November 2, 2025 – alongside human resource manager Sally Waigumo to pave the way for what the board termed as “review of internal matters.” Both were later reinstated.
Now, the Auditor-General’s report on the State-controlled reinsurer shows the two continued to receive full salaries during the suspension period, contrary to public service regulations.
The issue formed part of several breaches flagged in the audit, including payment of staff bonuses without approval from the Salaries and Remuneration Commission (SRC).
“Review of the corporation’s payroll for the year revealed that two senior officers who were on suspension from September 2, 2025 to November 2, 2025 continued to earn full salaries during the period of suspension,” the audit says.
“(This is) contrary (to) the requirements of part K.7 (2) of the Public Service Commission (PSC) Human Resource Policies and Procedure Manual which requires that where an officer is suspended from the exercise of the functions of his public office, he shall be entitled to full house allowance, medical benefits and no basic salary. In the circumstances, management was in breach of the law.”
However, the same manual provides that a suspended officer whose case ends in reinstatement rather than dismissal or punishment is entitled to recover withheld salary.
“Where disciplinary or criminal proceedings have been taken or instituted against an officer under suspension and such an officer is neither dismissed nor otherwise punished under these regulations, the whole or any salary withheld shall be restored to him upon the termination of such proceedings with effect from the date the salary was stopped,” the PSC manual states.
Dr Wachinga’s reinstatement came barely a month after he withdrew a case in which he had sued the Kenya Re board for unprocedural suspension and invitation for a disciplinary hearing.
Court filings showed Dr Wachinga had been suspended over what the board described as “not complying with instructions” in the handling of a disciplinary matter involving two of the reinsurer’s staff.
The spat began in April 2025 after a report by Dr Wachinga triggered disciplinary proceedings.
The board then instructed the managing director to conduct investigations and report back within 72 hours, a deadline that was allegedly missed twice.
He later dismissed the two employees, prompting his suspension after the board said it had not been involved in the terminations.
Kenya Re’s annual report shows Dr Wachinga’s pay fell to Sh29.57 million in the year ended December 2025 from Sh30.09 million a year earlier.
Bonus payments
The audit also shows the reinsurer paid bonuses of Sh102.27 million to staff and Sh3.45 million to board directors without seeking SRC approval.
“This was contrary to Article 230 of the Constitution, which establishes the SRC to set, review, and advise on remuneration and benefits for public officers to ensure fiscal sustainability, fairness, and equity,” the audit says.
Kenya Re maintained a Sh839.94 million dividend despite net profit falling 11.6 percent to Sh3.92 billion in the year ended December 2025.
The reinsurer attributed the drop in profitability to underperformance in its international treaty business and operations in Zambia and Côte d’Ivoire.
