New Directive for Importers: Digital Marine Cargo Insurance Now Mandatory Starting February 14, 2025
Effective February 14, 2025, all importers in Kenya will be required to digitally procure Marine Cargo Insurance (MCI) for their shipments through locally licensed insurance companies. This step must be completed before goods can receive customs clearance.
The new regulation stems from amendments made in the Finance Act, 2017, and the Marine Insurance Act (CAP 390). These laws stipulate that individuals with an insurable interest in marine cargo must obtain insurance from insurance providers licensed under the Insurance Act (CAP 487) in Kenya. Additionally, the legislation prohibits sourcing marine cargo insurance from foreign insurers, ensuring that coverage is obtained from within the country.
In a joint statement by the Insurance Regulatory Authority (IRA) and the Kenya Revenue Authority (KRA), it was emphasized that the move to digital platforms would simplify the insurance process for importers. This transition aims to streamline operations, reduce paperwork, and speed up the process of clearing goods through customs.
How the Digital Marine Cargo Insurance System Works
To obtain the necessary Digital Marine Cargo Insurance Certificate, importers will need to follow these steps:
- Ensure an Active Import Declaration Form (IDF): Importers must first have a valid IDF, as the digital insurance certificate can only be issued against an active IDF.
- Access Insurance Platforms: Importers and clearing agents can access a variety of platforms for purchasing marine cargo insurance. These include the Coral Mini App on the M-PESA Super App, Coral’s web portal, insurance underwriters’ websites, mobile apps for insurance underwriters available on M-PESA, and the Kentrade Single Window portal.
- Retrieve and Complete IDF Details: Upon logging into the platform, users can retrieve their IDF details using their account information. The system automatically populates these details for registered users.
- Pay and Submit the Insurance Premium: After confirming the IDF details, users must complete the form for the Marine Cargo Insurance certificate, pay the insurance premium, and submit the details electronically.
- Submit the Certificate to IRA: Once processed, the digital Marine Cargo Insurance certificate is submitted to the IRA’s electronic platform. The IRA then forwards it to KRA’s Integrated Customs Management System (ICMS).
- Confirmation and Customs Clearance: Upon successful submission of the digital certificate, the importer will receive confirmation of compliance. This confirmation is crucial for the clearance of goods within the ICMS, enabling smoother customs processing.
Benefits of the Digital System
This new process offers several advantages for both importers and the authorities. By using digital platforms, the process of acquiring marine cargo insurance becomes more efficient, reducing the potential for errors and delays. It also ensures that importers comply with local regulations, as all transactions are monitored and recorded through secure, government-linked platforms.
Moreover, this system aims to improve transparency and accountability in the maritime import process, as all stakeholders will be able to track the status of insurance certificates and customs clearance digitally.
Final Thoughts
The new requirement for digital Marine Cargo Insurance marks a significant shift in how Kenya handles import processes. As the deadline approaches, it’s essential for importers to familiarize themselves with the digital platforms and processes involved. By complying with these regulations, importers can ensure smoother operations, timely clearance of their goods, and alignment with national laws that prioritize local insurance companies.
