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Business News of Tuesday, 29 June 2021


Food and Beverage Association protests compulsory local insurance policy

Subsection 2 of Ghana Insurance Act 2021 also prohibits offshore marine cargo and hulk insurance Subsection 2 of Ghana Insurance Act 2021 also prohibits offshore marine cargo and hulk insurance

The Food and Beverage Association of Ghana (FABAG) is up in arms against government over the Ghana Insurance Act’s requirement for all imported goods to be insured by local insurance agents.

According to FABAG, the act seeks to help local insurance companies generate revenue at the expense of importers.

Section 222 of the Ghana Insurance Act 2021 (Act 1061) states that “a person who imports goods other than personal effects into the country shall insure the goods with an insurer licensed under the Act.”

Subsection 2 also prohibits offshore marine cargo and hulk insurance, with the exception of reinsurance contracts approved by the regulator.

But speaking to Business24 after a meeting with the Ghana Shippers Authority, Sam Aggrey, Executive Secretary of FABAG, said insuring imported goods with local companies should be optional rather than mandatory.

“When the goods reach, for instance, Tema, because you have insured the goods from the foreign origin, it is only appropriate that it ends there, unless you want to insure the goods through a local insurance agent to its final destination or warehouse. But what the government is saying is that, even if you are importing from, say, United Kingdom, the local insurance company must insure the goods from its foreign origin to the local port.”

He added: “Even if the local insurance company has a foreign agent from the importing country and I want to insure my goods to Ghana, it should still be optional, not compulsory. Again, if the goods come to Tema without being insured from its foreign origin but reach Ghana successfully, the law says I should still insure with a local agent, is it fair?”

FABAG is also calling for a review of the clause in the act which prescribes a custodial sentence for persons or entities who fail to comply with the policy. This, the association contends, is inimical and counterproductive to government’s agenda of making Ghana a business-friendly hub in the West African sub-region.