The High Court has ordered the liquidation of Blue Shield Insurance Company, marking the end of the road for the once-prominent insurer.

Justice Alfred Mabeya delivered the verdict after the Insurance Regulatory Authority (IRA) successfully argued that the company was beyond revival.

The court's decision stemmed from Blue Shield's inability to meet its financial obligations.

Justice Mabeya highlighted the lack of shareholder support in injecting capital to address the company's negative capital ratios and the staggering Sh800 million in verified liabilities.

"A liquidation order is hereby made against Blue Shield Insurance Company," declared Justice Mabeya.

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This order initiates the process of winding up the company's operations.

Liquidation involves selling off Blue Shield's assets to settle outstanding debts.

Any remaining funds after settling all claims will be distributed among shareholders.

The court battle leading to this outcome saw resistance from Ms Beth Muigai and Ms Jean Ngengi.

They argued for the company's revival, claiming liquidation was an overly harsh measure.

Blue Shield, incorporated in 1982, encountered financial difficulties in 2011.

This led to a period of receivership under the management of Eliud Muchoki from 2011 to 2014.

However, despite this intervention, the company continued to struggle.

According to Godfrey Kiptum, the IRA commissioner, Blue Shield failed to meet the expectations of policyholders.

He further pointed out numerous regulatory breaches, including non-payment of contributions to the Policy Holders' Compensation Fund, premium levies, and contributions to the Insurance Training and Education Trust.

Kiptum emphasized that Blue Shield lacked the necessary capital to sustain its operations.

He presented evidence of verified liabilities exceeding Sh855 million, encompassing court judgements, service provider invoices, and other financial obligations.

The court also heard recommendations for liquidation from the Policy Holders Compensation Fund Board of Trustees.

Their report, submitted in February 2017, cited Blue Shield's ongoing financial and operational woes, leading to a decline in business, resource limitations, and inability to fulfil contractual commitments.

The managing trustee of the Fund, William Masita, highlighted the repeated failure of shareholders to honour their commitments.

He asserted that the company's insolvency rendered it unfit to operate as an insurance provider.

Masita advocated for an insolvency order and the appointment of a provisional liquidator to ensure an orderly distribution of Blue Shield's remaining assets.

However, Ms Ngengi, representing the opposing view, argued against liquidation.

She labelled it a severe measure that would only serve to mask potential fraudulent activities by the statutory manager and the IRA.

Despite these objections, the court ultimately sided with the IRA's assessment.

The Blue Shield saga concludes with its assets being liquidated to settle debts, leaving policyholders and stakeholders to navigate the aftermath of this unfortunate turn of events.