Cargo imports without local marine insurance cover will not be cleared by the Kenya Revenue Authority (KRA) from November 1, 2026, as the government aims to retain billions of shillings in premiums within its economy.
Marine insurance policy protects goods from the risk of loss, damage, and theft during transit by sea, land, and air from the port of origin.
“Kenya Revenue Authority (KRA), in collaboration with the Insurance Regulatory Authority (IRA), will be enforcing mandatory Digital Marine Cargo Insurance (MCI) effective November 1, 2026, following previous notices,” the taxman said.
“Importers and clearing agents must ensure that all incoming consignments into Kenya are covered by a valid MCI policy issued exclusively by an IRA-licensed insurer.”
The latest enforcement follows earlier government efforts to introduce mandatory local marine cargo insurance, with the digital platform linking insurers, the IRA, eCitizen payment services and KRA’s customs processing system.
The government initially planned to enforce mandatory digital marine cargo insurance from February 2025 but later moved it to July 1, 2026. This was further extended to November 1.
Under the arrangement, importers must obtain a valid Import Declaration Form (IDF), which is used to generate a Digital Marine Cargo Insurance Certificate for the specific consignment.
The insurance premium is paid through the designated digital payment system, after which the certificate and payment confirmation are transmitted electronically to KRA for verification.
Having an insurance policy alone will not be sufficient if the required digital certificate has not been processed and successfully linked to the customs system before a declaration is lodged.
The requirement is intended to strengthen enforcement of laws governing marine insurance business in Kenya and address concerns over premiums paid to foreign insurers for cargo destined for the local market.
Industry estimates claim Kenya loses more than Sh70 billion of marine insurance business to foreign underwriters annually. The figure has not been independently verified.
Much of the business has traditionally been arranged through Cost, Insurance and Freight (CIF) contracts, under which overseas suppliers organise insurance and shipping for goods destined for Kenya.
The government wants importers to shift this business to locally licensed insurers, allowing more premiums to remain in the country and supporting the growth of the domestic insurance industry.
The requirement is anchored in Section 16A of the Marine Insurance Act, which provides for marine cargo insurance to be placed with insurers licensed under the Insurance Act. Section 20(4) of the Insurance Act also restricts the placement of Kenyan insurance business with unlicensed insurers without the required approval.
To implement the changes, the National Treasury directed the IRA to work with KRA and Safaricom to develop a digital platform that integrates insurance transactions with customs clearance.
The system is expected to improve transparency, strengthen regulatory oversight and reduce the risk of fraudulent insurance documents being used during customs processing.
Participating insurers include APA General Insurance, Britam General Insurance, CIC General Insurance, Old Mutual General Insurance, Pacis Insurance and Dynamique Insurance.
However, the changes have raised concerns among clearing and forwarding agents over the additional costs and administrative responsibilities being placed on importers and businesses.
John Mwashinga, a Mombasa-based clearing and forwarding agent, said the additional expense would ultimately be passed on to consumers.
“It will come with the cost, and it has to be transferred to the final user; we cannot bear it alone,” he said.
Importers will also need to review their existing arrangements with overseas suppliers to ensure that insurance requirements are met without unnecessarily duplicating cover.
Businesses that have traditionally relied on foreign suppliers to arrange insurance under CIF contracts may need to reconsider their purchasing terms and establish clear arrangements for obtaining local cover.
The changes could affect manufacturers importing industrial raw materials and machinery, traders bringing in consumer goods, and motor vehicle dealers whose consignments depend on timely customs clearance.
The government maintains that the reforms will create new opportunities for local insurers by increasing premium income and enabling them to participate more fully in risks associated with international trade.
Local insurers could also benefit from improved access to information on imported cargo, while policyholders would deal with companies operating under Kenya’s regulatory framework.
The digital system is expected to provide better visibility into marine insurance transactions and improve monitoring of compliance across the sector.
