Slow pace of implementing marine insurance surprises importers
What you need to know:
- IRA, under the marine insurance setup, requires that importers insure their goods using local companies to ease compensation in case of eventualities.
Uganda Clearing Industry and Forwarding Association and other stakeholders have said they are surprised by the slow pace that Insurance Regulatory Authority (IRA) has taken to implement marine insurance.
Speaking during an engagement for stakeholders including Kampala City Traders Association (Kacita) and Uganda Manufacturers Association, among others, to evaluate the impact thus far, Mr Jaffer Abdallah Farjallah, the Uganda Clearing Industry and Forwarding Association chairman, said they were dissatisfied with the slow pace with which IRA is implementing the localisation of marine insurance.
“It is surprising that we still have sensitisations taking place, yet we should be enforcing right now,” he said, noting that marine insurance, which was expected to take shape in October last year, continues to record low progress.
In July last year, government under IRA, implemented marine insurance that sought to protect importers from the challenge of seeking compensation from foreign-based insurers.
IRA, under the current setup, requires that importers insure their goods using local companies to ease compensation in case of eventualities.
Mr Farjallah also noted that apart from exposing importers to risks, the failure to fully implement marine insurance was making government to lose billions of shillings in income tax and stamp duty.
However, Mr Steven Kaddu Mukasa, the IRA manager inspection, said that whereas localisation of marine insurance was still slow, the progress so far was promising.
“The process takes time but we envision a big turnaround when it is fully implemented,” he said.
In July IRA warned that all importers trading in cargo across borders must insure their goods with local insurance companies, failure of which importers would be panelised.
IRA also indicated that it had already created an online portal through which automatic quotations would be generated and would detail premiums importer were required to pay after they had input what they are importing.
During the meeting, Mr Denis Jjemba Mulondo, the Kacita deputy spokesperson, said there was very low good will by government to implement marine insurance.
“The good will from government towards implementation [it] is still low and without all stakeholders, we are still having many challenges,” he said.
Over the years, IRA says, insurable risks, have been increasing, with a number of Ugandans losing goods worth billions of shillings due to reluctance to draw out insurance covers.