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Why court okayed liquidation of collapsed Xplico Insurance
Commissioner of Insurance and Insurance Regulatory Authority (IRA) Chief Executive Officer, Mr Godfrey Kiptum speaking during the 19th Annual Regional Conference of the Association of Insurance Brokers of Kenya (AIBK) held at Sarova Whitesands Beach Resort, Mombasa on November 6, 2025.
The High Court has allowed the liquidation of Xplico Insurance, sealing the fate of the nearly two-decade-old insurer after it failed to settle Sh4.12 billion in 8,982 policyholder claims.
The court, in granting the Insurance Regulatory Authority (IRA) the permission to liquidate the insurer, said continued operation would expose the public to further loss given that there is no viable recovery or restructuring plan on the table.
“Evidence on record further reveals that the respondent (Xplico) was granted multiple opportunities to regularise its position but failed to do so. In the premises, the court therefore finds that the statutory grounds for liquidation have been fully satisfied,” said the court in the judgment issued on March 19, 2026.
“The court must therefore prioritise the protection of policyholders and the integrity of the insurance sector. In the circumstances, allowing the respondent to continue operating would undermine public confidence and occasion further prejudice.”
Xplico now joins Concord Insurance and Standard Assurance in liquidation, which is the process by which a company’s existence is terminated by disposing of its assets to settle debts. Any money left after all debts, expenses, and costs have been settled is given to shareholders.
The IRA placed the insurer under statutory management in December 2023 after years of governance and financial challenges, including pile-up of unpaid claims, persistent shareholder disputes and inability to meet capital adequacy requirements as from 2015.
The court has agreed with the IRA that thousands of policyholders remain unpaid, and Xplico is incapable of meeting future claims, leaving no other option but to liquidate the insurer that started operating in October 2009.
A report from the provisional liquidator Diana Mumo, who has now been confirmed as the official liquidator, showed Xplico’s liabilities stood at Sh2.41 billion as of July 4, 2025 against a net book value of Sh1.23 billion and actual cash of Sh234.31 million.
Court papers show the insurer was found to have breached at least 11 provisions of the Insurance Act, including failure to maintain adequate capital, appoint a board of at least five members, settle claims within 90 days, maintain adequate reinsurance arrangements, keep proper books of accounts and pay insurance and training levies.
In addition, the company failed to file its investment plans with IRA and keep management expenses within the prescribed limits. It was also found to have dealt with unlicensed intermediaries, including Hussein Ali Shariff, Xperia Insurance Agency, and Baleon Insurance Agency.
The court was told the insurer had no bona fide shareholders and had 33 dormant bank accounts, 14 closed, and two that were attached due to debts.
The IRA had intervened through various statutory mechanisms, including the appointment of statutory directors in 2016, issuance of notices of cancellation of registration and engagements with shareholders to inject capital. However, the situation worsened.
By 2020, Xplico had a negative capital adequacy ratio and a Sh1.88 billion capital deficit as at August 2023 against the required minimum of Sh600 million.
Policyholders Compensation Fund (PCF), which was the statutory manager, recommended liquidation after having found the insurers to be “insolvent and incapable of revival,” according to court papers.
In particular, PCF stated that as at September 30, 2024, the insurer’s bank balances were Sh6.07 million. As at the end of 2022, the insurer had admissible assets of Sh1.1 billion against liabilities amounting to Sh2.4 billion.
