Kenya: Police, NHIF Bicker on Sh200m Refund

A parliamentary committee has summoned the management of National Hospital Insurance Fund (NHIF) to explain why it has not refunded Sh200 million in medical cover for the police to the Interior ministry as required by law.

The Public Accounts Committee (PAC) of the National Assembly wants NHIF Chief Executive Officer Peter Kamunyo to explain why it is taking long to have the money refunded.

The delays in paying the refund was flagged by Auditor-General Nancy Gathungu in her report on the accounts of the Interior ministry for the 2018/19 financial year.

Interior Principal Secretary Karanja Kibicho, while appearing before the committee yesterday in regards to the ministry's audit queries for the period under review, said efforts to have the money recovered from NHIF had hit a brick wall. This forced PAC chairman Opiyo Wandayi to order that Dr Kamunyo appears before the committee without fail.

"The CEO must appear before this committee to explain where the money is. This is public money and PAC is committed to ensuring that public funds are used prudently," Mr Wandayi, the Ugunja MP, directed.

The Sh200 million was a top-up to the Sh4.79 billion comprehensive medical insurance cover awarded to NHIF on September 26, 2017 to cushion members of the National Police Service who might exhaust their limits. The insurance cover was for a two-year period from October 1, 2017 to September 30, 2019.

Although the amount was refundable at the end of the contract period, Ms Gathungu in the audit report notes that it was yet to be refunded.

"It was not possible to determine whether the National Police Service got value for money that was due for refund at the end of the comprehensive medical cover contract," Ms Gathungu says in the audit report.

Yesterday, Mr Kibicho threatened to withhold further payment of insurance premiums to the NHIF until the money is refunded.

"As a ministry, we have written to NHIF but it has completely refused to respond to our inquiries," Mr Kibicho told the watchdog committee.

"In the meantime, we will use other measures including withholding the Sh200 million premium due to them until they respond," the PS said.

Mr Kibicho, however, told the committee that the ministry will have no problem if NHIF provides evidence to show how the money was used as stated in the contract document.

Previously, the NHIF was not allowed to engage in the provision of commercial insurance services to public entities and private companies as provided for under section 19 of the Insurance Act.

However, through a gazette notice on April 17, 2020, National Treasury Cabinet Secretary Ukur Yatani exempted NHIF from the legal provisions, effectively allowing the public insurer to engage in the insurance business.

Section 19 of the Insurance Act provides that any insurance provider operating in the country must be registered with the Insurance Regulatory Authority (IRA), the industry regulator.

NHIF is not a member of the IRA.

In 2012, the government mandated NHIF to provide medical cover to civil servants and members of the disciplined forces --the police and prison officers.

The government cited the high cost of private insurance and lack of structures to provide a medical cover of such a magnitude.

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