The Zambian government said it was on course to amend the insurance law that will address issues of outgoing reinsurance premiums, state media reported on Tuesday.
Recently, stakeholders in the insurance industry expressed concern that the country was losing money in insurance premiums to foreign insurers and that the country lost a total of 1.5 billion U.S. dollars between 2009 and 2015 worth of insurance premiums to foreign insurers.
Minister of Finance Felix Mutati said once in place, the new law would not allow reinsurance business to flow freely out of the country.
The new law would ensure that a greater portion of insurance was returned locally taking into consideration diversification of the risks, he added.
“We have been addressed with the issue by the Insurers Association of Zambia (IAZ) and we are already working on the revision of the Insurance Bill, which I have been participating in,” he is quoted saying by the Times of Zambia.
According to him, issues of outgoing reinsurance had been dealt with in the Insurance Bill which was under revision and was being amended.
Stakeholders feel that Zambia should adopt measures taken by other countries in Africa which no longer allow reinsurance business to flow freely out of their markets.
The stakeholders have urged the government to impose a tax on outgoing reinsurance to discourage the trend. Enditem