Insure locally, foreign firms urged

MINISTER of Transport, Works, Supply and Communications Yamfwa Mukanga has urged foreign contractors to insure their businesses locally to enable insurance companies benefit from the development projects that Government is implementing.
In 2005, Parliament amended Section 120 of the Insurance Act number 27 of 1997 to ensure that foreign based companies insure their businesses with local insurance firms.
Mr Mukanga said Government is aware that some foreign contractors insure their services in their respective countries of origin, noting that this deprives the local industry of revenue.
“It is the ministry’s view that various foreign contractors should insure locally so that the local insurance companies can benefit from Government projects and in turn receive revenue from the insurance companies,” he said.
The minister said this on Thursday during the launch of Statutory Instrument (SI) number 33, which makes it mandatory to display insurance discs on motor vehicles.
Mr Mukanga said the SI takes effect on July 12, 2015 but will come into force on January 1, 2016.
He said the six months period is to allow insurance firms complete their internal processes of issuing out the discs to those that have existing insurance cover and to also adequately sensitise the public on the importance of the measure.
“Government is convinced that the implementation SI 33 and the partnering of insurance companies will result in the insurance companies having liquidity and witness the sector increase its contribution to gross domestic product from the current levels of less than two percent to at least 10 percent,” Mr Mukanga said.
He is optimistic that the initiative will not only strengthen the insurance sector but will also ensure that claims from insurance companies are paid in time.

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