Insurance broker KMRS disputes overbilling claims as SASRIA premium controversy surfaces
South African Public Sector Insurance Broker KMRS Embroiled in Financial Controversy
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Kunene Makopo Risk Solutions (KMRS), a prominent insurance brokerage serving South Africa’s public sector, is involved in controversy as allegations of financial impropriety, contract overbilling, and shareholder disputes surface.
With nearly 20 years in operation and an approximately 60-person workforce, KMRS has been a key provider of risk and insurance solutions to municipalities and state-owned enterprises.
The company has built a reputation as a trusted partner; however, recent legal filings and insider reports reveal a more complicated narrative.
KMRS’s contract with the City of Mhlathuze is central to the unfolding controversy. Municipal sources have raised concerns regarding alleged overbilling, triggering internal investigations.
While KMRS denies any wrongdoing, stating, “We unequivocally refute any suggestion of overbilling or unethical conduct. Our pricing is actuarially informed, market-benchmarked, and compliant with regulatory standards,” documents filed in court in June say otherwise.
A Notice of Motion dated June 12, 2025, reveals ongoing litigation relating to unpaid premiums and misappropriated client funds, although the municipality is not explicitly named.
Claims involving the South African Special Risks Insurance Association (SASRIA) are even more serious.
Industry insiders assert that KMRS failed to remit R38 million in SASRIA premiums collected on behalf of the Passenger Rail Agency of South Africa (PRASA), reportedly treating the funds as profit. However, KMRS countered this.
“The SASRIA rate discrepancy resulted from a system-wide issue affecting multiple industry players, which SASRIA has since addressed.”
The company also stresses that it is not under formal legal review and that PRASA has not filed a complaint.
Contrary to this stance, legal affidavits imply that PRASA has launched internal probes into premium handling and scrutinised KMRS’s accounting practices.
The documents highlight that “premiums collected from clients were not passed on to insurers promptly,” raising potential breaches of fiduciary duty.
Reports of internal shareholder conflict further complicate the picture. Sources at KMRS claim a leadership rift has stalled critical decisions and may escalate into legal battles.
While KMRS insists service delivery continues uninterrupted, court filings suggest governance issues, including financial transparency and board authority disputes.
In response, KMRS reiterated its commitment to compliance and quality assurance, highlighting its ISO 9001:2015 certification and ongoing third-party audits.
“Our licences remain active, and we are subject to independent third-party assurance processes,” the company stated.
Attempts to secure comments from the City of Mhlathuze were unsuccessful as the Municipal Manager, Phakama Mhlongo, did not respond to questions from IOL. SASRIA did not respond by publication time.
KMRS stands firm, asserting its dedication to regulatory alignment and governance.
“We remain committed to regulatory alignment and governance standards,” the company stated.
thabo.makwakwa@inl.co.za
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