Former AG Muturi warns Sh1.2b claims fund illegal
National
By
Irene Githinji
| Sep 19, 2025
Former Public Service Cabinet Secretary, Justin Muturi, has raised concerns over the Government’s decision to allocate Sh1.2 billion to settle civil servants’ injury and accident claims.
Muturi on Thursday said the decision sparks "serious questions" about its legality.
While acknowledging the need to address the long-standing claims, Muturi said the mechanism chosen by the Ministry of Public Service has revived an old problem abandoned for being unlawful.
“Legal experts argue that unless properly aligned with the Work Injury Benefits Act, the Insurance Act, and the Public Service Superannuation Scheme Act, the initiative exposes the Government to litigation, financial risk, and credibility damage,” he argued.
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The former Attorney General said the failure to adhere to the law and constitutional provisions has left civil servants’ claims amounting to Sh7.6 billion unpaid, which includes claims for which the Government has already remitted premiums to the Social Health Authority (SHA).
“The situation, compounded by the inexperience of new officials at the Ministry of Public Service and Ministry of Health, has left next of kin and injured public servants desperately begging for benefits that remain overdue despite clear legal and financial obligations,” he added.
Public Service and Human Capital Development Principal Secretary Jane Imbunya announced that the funds would be used to clear claims under Work Injury Benefits Act, Group Personal Accident (GPA), and Last Expense schemes, accumulated since April last year.
The disbursement is to be overseen by the State Department for Public Service through a newly created internal compensation fund.
Muturi said in 2012, the Government established a GPA Operations Unit to handle injury and accident claims and in 2017, the Miscellaneous Amendment Act amended Section 20(4) of the Insurance Act, making it illegal for unlicensed entities to handle insurance business.
He explained that violations attract penalties of up to Sh10 million or five-year imprisonment.
“Following this, Cabinet Memo CAB (17)60 disbanded the GPA Unit, transferring insurance responsibilities to the National Hospital Insurance Fund (NHIF). By 2020, NHIF had secured a legal exemption to underwrite enhanced covers, including Covid-19, in partnership with commercial insurers,” said Muturi.
Despite this, claims worth Sh3.93 billion from the disbanded unit remain unsettled and over Sh4 billion for period starting from April 14, 2021.
Citing the legal framework in question, Muturi said the new internal fund may breach several laws, including Work Injury Benefits Act, 2007 (Section 7), which requires employers to maintain insurance policies with approved insurers.
Others that risk being breached are Insurance Act, Cap 487 (Section 20(4)), which criminalises unlicensed insurance operations, Public Service Superannuation Scheme Act, 2012 (Section 6(4)), mandating government to take and maintain life and disability insurance policies not self-administer schemes as well as the Public Service HR Manual (Section D), which requires employee benefits to be managed under regulated insurance frameworks.
On legality issues raised, he said the fund effectively conducts insurance business outside the legal framework while policy reversal contradicts Cabinet decisions that previously dissolved similar funds.
“There are risks of exposure to litigation, where trustees under the Public Service Superannuation Scheme may be held liable for statutory breaches. Concerns of fraud and mismanagement have also been raised where, without actuarial or regulatory oversight, risks of abuse are high as well as reputational risk and inviting the President to officiate the launch of a scheme inconsistent with the law could embarrass government at the highest level,” said Muturi.