‘Zambia must seal insurance revenue leakage’

THE insurance industry has proposed the establishment of a motor insurance pool which will have presence at all border posts to save revenue leakage on imports.

This proposal will eliminate insurance fraud at border posts, says Insurers Association of Zambia (IAZ) Executive Director, Nkaka Mwashika.

Dr Mwashika said IAZ had observed that the economy was losing huge amounts of money annually through the payment of insurance premiums on imports.

He explained that imports case into Zambia on a Cost Freight and Insurance basis (CIF), instead of importing on a Free on Board (FOB) basis, while exports went out of the country on FOB basis.

Dr Mwashika said this when he and his team paid a courtesy call on Transport and Communication Minister, Mutotwe Kafwaya.

The purpose of the consultative meeting was to raise issues that were crucial for the growth of the insurance sector, and for the insurance sector to better serve the general public.

"To enhance this further the insurance industry proposed that insurance for motor vehicles entering the Zambian boarders be also sold as part of the one stop compliance procedures for vehicles getting into the country.

"Zambia lost over K1.5 billion between 2009 and 2015 because of this practice. Some countries in the region are upon realising the leakage of forex, are now moving towards stemming this practice," Dr Mwashika said.

He proposed that insurance sector should take steps to domesticate marine (i.e. import and export) insurance.

Dr Mwashika said IAZ wanted the full support of its members towards the implementation of the RTSA online Road Tax System.

"The system requires that motor vehicle insurance should be confirmed by insurers making an electronic submission of all insured vehicles, before road tax can be issued," he said.

He indicated that a unified insurer online platform could help prevent any delays from the insurers, and that a proposed system was already being discussed by stakeholders.

In response, Mr Kafwaya expressed his appreciation for the efforts the insurance sector was making towards the common goal of serving the ordinary citizen and economic growth.

"The SMART Zambia project that enabled the digitizing on RTSA services, is a Government project, and any initiatives to support the smooth running of the system are welcome, and Government fully supports the initiative that IAZ has proposed," he said.