There is a strict requirement in the law that prohibits procurement of marine insurance cover from foreign firms “except in exceptional circumstances.”
The Association of Kenya Insurers (AKI) recently said local marine cargo insurance premiums grew 64 per cent in the first half of the year, a performance the lobby termed below par.
The government plans to seal loopholes in the marine cargo insurance system used by importers to avoid paying billions of shillings to local players as well as a web of tax evasion probably aided by rogue officials.
“We are in talks with the Kenya Revenue Authority (KRA) and the Insurance Regulatory Authority (IRA) to make the law watertight,” said Maritime Affairs Principal Secretary Nancy Karigithu.
She noted there is a strict requirement in the law that prohibits procurement of marine insurance cover from foreign firms “except in exceptional circumstances.”
“The requirement can be abused and we are looking to address this,” said Ms Karigithu amid industry-wide concern that not all importers were complying with the law.
The Association of Kenya Insurers (AKI) recently said local marine cargo insurance premiums grew 64 per cent in the first half of the year, a performance the lobby termed below par.
The industry association said premiums collected hit Sh1.14 billion compared to Sh694.9 million in a similar period last year.
“Though positive, the premiums are yet to meet the industry estimation, which was projected to be at least Sh5 billion by half year, based on the country’s import figures,” said AKI.
Out of the 35 insurance companies that wrote the risk in the period, only two recorded premiums of Sh100 million and above.
AKI has now resolved to probe gaps including non-compliance with the law by importers, or if inefficiencies of online portals could behind the failure to take off.
“We are probing all these possibilities to see what the problem is,” said AKI chairman Patrick Tumbo.
