The Policyholders Compensation Fund (PCF) has hiked the maximum amount payable to policyholders as compensation on any one claim, for all classes of insurance, to KES500,000 ($3,870), in the event of an insurance company falling bankrupt.
The new cap is double that of the previous ceiling of KES250,000.
The decision to increase the cap was made by the PCF board of trustees in consultation with the Cabinet Secretary, National Treasury, according to a notice published in the Official Gazette.
The compensation limit applies to policyholders and claimants of any insurer that is, after the commencement date of the notice, placed under statutory management or whose licence is cancelled.
The notice, dated 1 January 2026, was published in the Gazette on 9 January.
The PCF was established under the Insurance Act to protect policyholders by providing compensation in the event that an insurance company becomes insolvent and is unable to meet its obligations to its customers. The Fund is financed by levies collected from licensed insurance companies operating in Kenya.