MANUFACTURERS, traders and shippers want the new directive on mandatory local acquisition of marine insurance suspended for at least six months, for further engagement.
The rule that came into place on February 14 requires a person with insurable interest in marine cargo to place marine cargo insurance with a locally registered insurer, unless prior exemption has been granted by the authorities.
This comes as Kenya Revenue Authority and the Insurance Regulatory Authority take another shot at localising marine insurance which is yet to pick since it was mooted about a decade ago.
Kenya Association of Manufacturers, Shippers Council of Eastern Africa, Kenya International Freight and Warehousing Association, Kenya Transporters Association, Kenya Private Sector Alliance, Kenya National Chamber of Commerce and Industry and the Kenya Ships Agents Association, want the rule differed.
In a joint memorandum to IRA and KRA seen by the Star, the industry players want a suspension of the implementation of the notice introducing the mandatory marine local insurance directive, to allow a review of key issues challenging.
“This request is based on our analysis of the significant impact the directive will have on the private sector if unaddressed which includes adversely affecting trade, increasing the cost of doing business and hindering Kenya’s industrialisation agenda,” chief executives from the groups say in the joint memo.
Key considerations to take into account before implementation, according to the captains of industry, includes global trade practices where international trade (imports and exports) is based on globally accepted commercial terms such as CIF (Cost, Insurance, and Freight) and Free on Board (FOB), negotiated between suppliers and importers.
“Forcing importers to take local cover may result in double insurance, leading to disputes over claims settlement,” the memorandum reads in part. Marine insurance is also not a mandatory requirement under Kenyan and East Africa Community Customs Management Act, they have argued.
