CAK has fined Directline Assurance KSh85,019,847 for abusing buyer power. Two car repair shops, Kilele Motors and Midland Autocare, filed complaints over unpaid invoices.
The Communication Authority of Kenya (CAK) has penalised Directline Assurance after two Nairobi-based repair centres accused the insurer of failing to pay for work already completed.
The complaints were filed in 2024 by Kilele Motors and Midland Autocare, who provided evidence such as authorisation letters, re-inspection reports, invoices and communication records.
Directline had contracted the two garages in 2023 and 2024 to repair vehicles insured under their policies.
At the time of filing the complaints, Directline owed Midland Autocare KSh7,616,456 and Kilele Motors KSh5,038,094.
CAK noted that during investigations, Directline made partial payments, but still left unpaid balances of: KSh1,343,331 owed to Kilele, KSh4,719,904 owed to Midland
CAK stated that the delays put both businesses in a difficult financial position, affecting their ability to pay suppliers, staff, and rent.
According to the authority, Directline was given several chances to respond to the allegations but failed to do so.
The insurer reportedly ignored 19 reminders, prompting CAK to take action.
The authority fined Directline a total of KSh 85,019,847.32 and ordered it to settle the remaining KSh 6,063,235 owed to the repair shops.
CAK further directed Directline to review its supply contracts to comply with Section 24A(7) of the Competition Act.
This includes adding a clause for interest on late payments, which protects suppliers when invoices are delayed.
The insurer was also warned against repeating any conduct that violates competition laws.
CAK Director General David Kemei said delaying payments hurts small businesses and slows economic growth.
“Abuse of buyer power cripples suppliers and defeats the goal of promoting inclusive economic development. SMEs are liquidity-constrained, and failure to honour payments can destroy a business and cause job losses,” Kemei stated.
