Automated Summary
Key Facts
Xplico Insurance Company Limited was placed under Statutory Management on 7 December 2023 after failing to meet Capital Adequacy Requirements since 2015 and exhausting unsuccessful capital-raising efforts. The Insurance Regulatory Authority (Petitioner) appointed the Policyholders Compensation Fund as Statutory Manager, who reported in November 2024 that the company is insolvent and unable to meet obligations, recommending liquidation. The court approved an interim liquidation order on 5 March 2025, appointing Diana Nduku Mumo as provisional liquidator to preserve assets and manage the company’s affairs pending the liquidation petition’s determination.
Issues
The court considered whether there was sufficient evidence to warrant the appointment of an interim liquidator for Xplico Insurance Company Limited (Under Statutory Management) pending the determination of the liquidation petition, under Sections 427 and 437 of the Insolvency Act and Section 123 of the Insurance Act. The applicant (Insurance Regulatory Authority) argued the company was insolvent and required asset preservation for creditor repayment.
Holdings
The Court allowed the application and appointed Diana Nduku Mumo as the provisional liquidator with the functions to trace, take possession of, collect, recover, protect, and preserve the value of the company's assets pending the determination of the liquidation petition, and to carry on the business of the company for the benefit of the liquidation.
Remedies
- Costs in the Cause are ordered.
- Diana Nduku Mumo is hereby appointed as the provisional liquidator with the following functions: i. To trace, take possession of, collect, recover, protect, and preserve the value of the assets of the company pending the determination of the liquidation petition. ii. To carry on the business of the company for the benefit of the liquidation herein.
Legal Principles
The court applied Section 437 of the Insolvency Act to determine the appointment of a provisional liquidator, emphasizing the Court's authority to appoint such a liquidator, their eligibility as licensed insolvency practitioners, and the functions/powers to preserve company assets pending liquidation.
Cited Statute
- Insurance Act
- Insolvency Act
Judge Name
- ADO Moses
- MA Otieno
Passage Text
- The Court orders the appointment of Diana Nduku Mumo as the provisional liquidator with specific functions to trace, preserve, and manage the company's assets pending liquidation.
- The Court finds that the evidence warrants the appointment of an interim liquidator pending the determination of the liquidation petition, as the company cannot meet its financial obligations and its assets need preservation for creditors.
- The Court confirms that all three proposed insolvency practitioners (Diana Nduku Mumo, Etemesi Elfas Oniang'o, and Kolluri Venkata Subbaraya Kama Sastry) are duly licensed as of October 2024.