A petitioner has raised allegations that the National Hospital Insurance Fund (NHIF) lost Ksh21 billion due to fraudulent claims.
Bernard Muchere, a fraud risk management expert and former National Treasury auditor, presented these claims to the Public Petitions Committee on September 12, 2024.
Muchere revealed that NHIF’s books were manipulated through “Incurred But Not Reported” (IBNR) claims. This mechanism is typically used by insurance companies to reserve funds for claims not yet submitted. However, in this case, Muchere alleges the system was exploited to siphon funds from NHIF.
He further accused Kenbright Actuarial and Financial Services, an actuarial firm, of collaborating in the creation of fraudulent IBNR reserves, which were backdated to the 2019-2020 financial year.
National Treasury premises in Nairobi. Source: The Star/Facebook
These claims, he says, were responsible for the significant financial strain NHIF faced, which prevented the fund from paying genuine hospital bills for its members.
The chairman of the committee, Vihiga MP Ernest Ogesi, vowed to investigate the matter thoroughly. He also summoned NHIF management and the actuarial firm to answer for the allegations.
Muchere’s claims highlight a deeper financial crisis within NHIF, now renamed the Social Health Insurance Authority after recent law changes. He urged Parliament to investigate further, citing that in previous financial years, these reserves were non-existent.
This revelation raises concerns about the management and oversight of public health funds, potentially affecting millions of Kenyans who rely on NHIF for medical cover.
Muchere is a former internal auditor at the National Treasury.
“I can conclusively state that the IBNR reserves were fraudulently created to siphon NHIF funds,” Muchere told the Public Petitions Committee chaired by Vihiga MP Ernest Ogesi.
Ogesi said the committee will get to the bottom of the “serious” allegations.
