Questions over how a Ksh342.8 million legal bill was handled by the Insurance Regulatory Authority (IRA) have put the agency under scrutiny, with Parliament demanding details of officials involved in the disputed payment.
The National Assembly Public Investments Committee on Commercial Affairs and Energy wants IRA to explain how it contracted an external law firm and why the services were outsourced despite the authority having an internal legal department.
The committee, chaired by Pokot South MP David Pkosing, directed IRA to submit a comprehensive report showing the process followed before the law firm was engaged.
Lawmakers also want details of the criteria used to prequalify external advocates who provide legal representation to the authority.
Among the information sought is the identity of officials who managed the contract with the law firm. Parliament also wants a complete list of officers involved from the time the agreement was initiated to the time the legal fees were settled.
IRA has further been asked to explain the current status and capacity of its internal legal department. The committee wants to understand why the authority considered it necessary to hire an external firm to handle the case.
The dispute began with a disagreement over legal fees arising from a case in which the law firm represented IRA in a matter involving a liquidated insurance company.
The firm sought Ksh176.1 million in legal fees, citing the value of the claim in the case. IRA, however, offered Ksh875,197, creating a wide gap between the two sides.Attempts to settle the disagreement through negotiations and mediation did not resolve the matter.
The law firm later obtained court-issued garnishee orders that allowed it to recover money directly from IRA’s bank accounts.
It initially collected Ksh15 million before the amount recovered increased to Ksh303.8 million by May 2023.
With the authority facing financial pressure from the legal dispute, IRA turned to the National Treasury for emergency funding. Treasury approved Ksh342.8 million to facilitate the settlement.
The approved amount included Ksh79.8 million in interest that had accumulated due to delays in settling the legal fees.
The committee’s inquiry is expected to focus on the decisions made during the contracting process and the officials responsible for overseeing the agreement, as Parliament seeks a clearer account of how the disputed payment arose.
