TANZANIA is determined to have a national insurance policy in place before the end of next year to help the insurance sector grows fast and contribute adequately to the national economy.
Financial experts believe that the envisaged policy would bring the requisite reforms and increase the sector's contribution to the gross domestic product (GDP) to between three and five per cent from the current 0.9 per cent.
The Parliamentary Standing Committee on Economy, Trade and Industry said in its annual report for the year 2013 that formulation of the policy will go a long way in enhancing the industry's contribution to the GDP.
"If the government wants to expand insurance coverage for the majority of the population particularly low income earners it should formulate an insurance policy," committee chairman Mahmoud Mgimwa (Mufindi North-CCM) said in Dodoma recently.
Reached for comments, Acting Finance Minister Saada Mkuya Salum told the 'Daily News' over the weekend that the policy will come into force at the beginning of the next fiscal year.
"The process involves a lot of stakeholders and that is why there were some delays in its formulation," Ms Mkuya said in a telephone interview. A study conducted by the Tanzania Insurance Regulatory Authority (TIRA) shows that only 19 per cent of Tanzanians are covered by insurance.
"Apart from the policy, the government should also take serious efforts to improve the sector by making use of information and communication technology (ICT), as this would increase revenues and check use of fake insurance cards," Mr Mgimwa said. On the other hand, the parliamentary committee said it was high time the government started insuring its fleet of vehicles and property.
"This will help widen the insurance coverage and at the same time save the government from losses it incurs when its vehicles are involved in accidents or when its property is damaged," the parliamentary committee chair said.
In an interview with this paper in July, this year, the Commissioner of Insurance, Mr Israel Kamuzora, said the country's growing insurance sector has been operating without a guiding policy since the market was liberalised 13 years ago.
The commissioner said the envisaged insurance policy will among other things direct whether the government should or should not insure its fleet of motor vehicles. "The issue on whether or not to insure government motor vehicles has been a very contentious matter, but the policy will give the way forward," he said then.
Ms Mkuya hinted during the interview that if the government is to insure its vehicles and property, then it would use the state-owned National Insurance Corporation (NIC) for that purpose.
A consultant hired by the World Bank and Bank of Tanzania (BoT) on the envisaged policy has already finished the work and offered recommendations which are now being considered, according to Mr Kamuzora.
Through the policy, the government would be advised to invest in the insurance sector against disasters as well as universal medical insurance for the population. The agriculture sector will also be considered by the policy.
"India and Philippines are among countries that have utilised insurance to improve lives of their people. The policy will be a catalyst for economic growth," Mr Kamuzora pointed out.