Mandatory insurance rules for public amenities coming

Dar es Salaam. The guidelines for compulsory insurance cover for public amenities will be ready early next year as the sector regulator seeks to increase the uptake of indemnity products and protect people against unforeseen circumstances, it was heard in Dar es Salaam yesterday.
The revelation by the Commissioner of Insurance, Dr Baghayo Saqware, comes five months after the government amended the Insurance Act CAP, 394 – through the Finance Act 2022 – to among other issues, expand the scope for mandatory insurance to include public markets, commercial buildings, imported goods, marine vessels, ferries and pontoon boats.
Apart from enhancing financial inclusion and increasing insurance uptake, the move also seeks to compel public building owners or facilities that attract lots of people such as football ground or markets to pay compensation to people who have been injured as a result of a disaster that may occur within those buildings.
Speaking during the 2nd Annual General Meeting of regional leaders of Insurance Agents Association of Tanzania (IAAT), Dr Saqware said Tanzania Insurance Regulatory Authority (Tira) has completed the guidelines and that the responsible minister has already signed the document.
“We will launch the guidelines next year to allow insurance stakeholders to start designing products in the four areas that are mandatory according to the law,” he said. Dr Saqware urged insurance agents to use the guidelines as an opportunity for them to start increasing investment so that they can use the opportunity that is about to start.
He said the mandatory cover arrangement will raise citizens’ risk protection level in line with the Financial Development Master Plan (FDMP).
The FDMP seeks to ensure that up to 50 percent of adults are insured by the year 2030.
The cover will also help small traders to continue with business in case of disasters such as fire.
Meanwhile, insurance agents say they face five key challenges in conducting their daily undertakings, requesting the Tira to intervene. The challenges – highlighted by IAAT chairman, Sayi John - include the need to review of the commission rate for motor vehicles insurance cover from the current 12.5 percent to 20 percent so that they can afford the operating costs.
They also want Tira to bring down the fee for registering an insurance agency from Sh500,000 to Sh250,000. This, he said, would allow many more people to venture into the business of insurance as agents and thus play a role in advancing the penetration rate.
The coming of bancassurance services has brought new challenges to insurance agents because the latter now have to work hard and compete with formidable commercial banks for insurance business.
“The bancassurance has taken our business and we want authorities to look at this again,” he said.
He said much as they want every player to benefit from the business, they believe bankers should deal exclusively with corporate clients and leave the rest to agents.
He pointed out that most of the agents do insurance business without having enough expertise in the subject matter.
“As such, insurance companies should provide training so that stakeholders can better understand products they sell…Each insurance company should – at the end of each year - show how many agents they have trained and in which specific area,” he said.
The IAAT general secretary, Ms Esther Mwamfupe, said the costs that agents incur to set up an office were different from those incurred by their competitors from telecom companies.
“We have to pay the council and others but we also have to hire people who have studied insurance,” she said, adding that despite such payments, the commission they receive from insurance companies was the same as those that telecoms get.
“This is unfair and we ask Tira to work on this,” she said.
In another development during the meeting the IAAT in collaboration with Bumaco insurance launched the funeral cover for its members and they expected to cover over 1,000 people by 2023.
“Although we are selling insurance, but we as members must have insurance to protect us from risks so this will help our members and their families,” said Ms Mwamfupe. Responding to all the challenges raised, Dr Baghayo said his office will work on them.
“Commission should not be a challenge because it just requires a change of regulations. We will also look at how we can help you on the issue of registration fees,” he said