Press Center | Freight Shipping Logistics News
Apr 13, 2011
General
caxias
Insurance providers can increase their turnover if rules compelling importers of cargo to purchase marine cover locally are enforced.
Insurance providers can increase their turnover if rules compelling importers of cargo to purchase marine cover locally are enforced.
Despite there being in place a legal framework for over a decade now, compulsory insurance of sea cargo imports by locally registered firms has not seen the light of day since its enactment.
Insurance Regulatory Authority (IRA) head of consumer protection, Ms Monica Thirima said that currently, there are no sufficient mechanisms to ensure that all importers buy insurance here.
The authority, she said, is working with Kenya Revenue Authority (KRA) on modalities that will ensure importers buy cover from local firms.
This may become a requirement before the goods are released.
The need to retain revenue in Kenya in the form of insurance premiums and the creation of business for domestic players was a policy informing the enactment in 1999 of the Insurance Act.
In 2010, imports valued at Sh947 billion would have earned Kenya Sh7.1 billion if importers had insured goods locally.
Exports valued at Sh409 billion would have earned the country Sh3.3 billion.
Low incidence of accidents during voyage in the high seas has made many Kenyans ignorant of marine insurance need.
If provisions of the Insurance Act on compulsory insurance of marine cargo imports by Kenyan registered companies are effectively implemented and enforced, importers can be able to negotiate for discounts.
Not always easy
“It is not always easy to tell whether you got the most competitive insurance cover and transport,” said Ms Thirima.
There would be easier processing and enforcement of insurance claims when both the insurer and the importer are in the same jurisdiction, she said.
She said that marine insurance in Kenya is cheap compared to other covers with premiums range at between 0.8 and 1 per cent.
“The importer would attain the freedom to choose the carrier offering the most suitable terms as opposed to the current practice where the seller makes the choice,” said Ms Thirima.
Despite there being in place a legal framework for over a decade now, compulsory insurance of sea cargo imports by locally registered firms has not seen the light of day since its enactment.
Insurance Regulatory Authority (IRA) head of consumer protection, Ms Monica Thirima said that currently, there are no sufficient mechanisms to ensure that all importers buy insurance here.
The authority, she said, is working with Kenya Revenue Authority (KRA) on modalities that will ensure importers buy cover from local firms.
This may become a requirement before the goods are released.
The need to retain revenue in Kenya in the form of insurance premiums and the creation of business for domestic players was a policy informing the enactment in 1999 of the Insurance Act.
In 2010, imports valued at Sh947 billion would have earned Kenya Sh7.1 billion if importers had insured goods locally.
Exports valued at Sh409 billion would have earned the country Sh3.3 billion.
Low incidence of accidents during voyage in the high seas has made many Kenyans ignorant of marine insurance need.
If provisions of the Insurance Act on compulsory insurance of marine cargo imports by Kenyan registered companies are effectively implemented and enforced, importers can be able to negotiate for discounts.
Not always easy
“It is not always easy to tell whether you got the most competitive insurance cover and transport,” said Ms Thirima.
There would be easier processing and enforcement of insurance claims when both the insurer and the importer are in the same jurisdiction, she said.
She said that marine insurance in Kenya is cheap compared to other covers with premiums range at between 0.8 and 1 per cent.
“The importer would attain the freedom to choose the carrier offering the most suitable terms as opposed to the current practice where the seller makes the choice,” said Ms Thirima.
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