Tanzania to collect 500bn/- from insurance companies

 

Director of Transport Services Division in the Ministry of Works, Transport and Communication, Eng Aron Kisaka revealed this yesterday in Dar es Salaam, when speaking at a joint meeting between government officials, insurance firms and stakeholders.

He said that the development came after the amendment of the Insurance Act (No. 10 of 2009), that requires all importers to procure their cargo insurance locally.

According to him, before the amendment, a number of importers used to insure their imports in foreign countries where they purchased their cargo.

The official stated that according to a study conducted by the Intergovernmental Standing Committee on Shipping (ISCOS), the country had been losing billions of shillings annually in the sector.

Eng Kisaka further explained: “This will help a lot to protect billions the country was repatriating to foreign insurers where he said time has come for the country to start gaining what it was losing many years ago.”

He noted that worldwide, many countries had a legislation protecting their local insurance industries. But East African countries were yet to do so; this is why for many years insurance premiums had been remaining and benefiting in foreigner countries.

For his part, the Insurance Commissioner from Tanzania Insurance Regulatory Authority (TIRA) Dr Baghayo Saqware said that in June, this year the country amended the insurance law, making clear that all ground transport, marine and air cargo insurance covers for Tanzanian imports must be affected by a Tanzanian insurer.

He called upon all importers to adhere to the new law and regulations warning those who will fail to comply with the law, legal measures will be taken against them.

“My plea also goes to all Tanzanians to grab opportunities in the insurance sector. TIRA will continue educating the public on the new law and investment opportunities available in the sector,” he said.

ISCOS secretary general Keneth Mwige, explained that the East African economies have been losing millions of dollars annually in form of Marine Cargo Insurance (MCI) premiums, which are being left to foreign insurance firms.

“We have now woke  up as a region and recognised that we are losing billions of money each year. So what is needed now is to ensure that our laws were fully implemented,” he said.

He said that ISCOS was formed by the four states of Kenya, Tanzania, Uganda and Zambia in 1967 to perform various functions on their behalf such as negotiation on freight rates, fighting against unjustifiable surcharge and other charges on seaborne cargo. Passed by the Parliament in June this year, the Insurance Act also gives two-thirds ownership of brokerage firms to Tanzania registered firms. They require insurance brokers to be at least two-thirds (above 66 per cent) owned and controlled by Tanzanian citizens-a 100 per cent increase from the previous local-participation requirement of one-third or 33 per cent).

Under the new law, the Commissioner of Insurance has powers to set minimum rates of premiums payable for different classes of insurance, by publishing the orders in the Government Gazette.