Importers have been advised to reassess their trade agreements to avoid paying twice for cargo insurance following the implementation of Kenya’s mandatory Marine Cargo Insurance (MCI) requirement.
The guidance comes as businesses begin adjusting to new regulations that require all imports destined for Kenya to be insured by locally licensed underwriters before they can be cleared through customs.
Manufacturers and importers are now reviewing their international supply arrangements in response to the policy, which took effect on July 1 and is expected to reshape the country’s import insurance landscape.
Kenya Association of Manufacturers (KAM) Chief Executive Tobias Alando said manufacturers, who import significant volumes of machinery and raw materials, are closely monitoring the cost of local marine insurance.
He said premiums offered by local insurers should remain competitive with international rates while calling for clear guidance on how existing insurance contracts will be phased out without disrupting commercial relationships.
The government introduced the new rules to retain insurance premiums within Kenya, strengthen the domestic insurance industry and improve oversight of imported cargo.
Implementation will be supported by a digital verification platform linking the Insurance Regulatory Authority (IRA), the Kenya Revenue Authority (KRA), eCitizen and licensed insurance providers.
The regulations also bring an end to the widespread use of Cost, Insurance and Freight (CIF) contracts, under which overseas suppliers arranged marine insurance on behalf of Kenyan buyers. Businesses will now need to renegotiate supply agreements using alternative international shipping terms.
Shippers Council of Eastern Africa (SCEA) Chief Executive Agayo Ogambi cautioned importers to review their contracts carefully to avoid duplicate insurance costs.
He noted that because Kenyan law now requires marine cargo insurance to be obtained from locally licensed insurers, the traditional CIF arrangement is no longer appropriate for imports into the country.
According to Ogambi, businesses should instead adopt the Cost and Freight (CFR) Incoterm, where overseas suppliers cover transportation costs while Kenyan importers obtain marine cargo insurance locally.
SCEA said imported machinery, industrial equipment, motor vehicles and electronics have traditionally accounted for the largest share of foreign marine insurance premiums, particularly for goods sourced from China, India, Europe and the United Arab Emirates.
The council welcomed the rollout of a digital platform connecting the IRA, KRA’s Integrated Customs Management System (ICMS) and eCitizen, saying it addresses earlier concerns about implementation.
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Ogambi, however, urged authorities to ensure the platform remains reliable and that insurers offer competitively priced products comparable to those available in international markets.
He also called on the Commissioner of Insurance to clarify how cargo already in transit under existing foreign insurance policies will be treated at customs.
SCEA proposed that the new requirement should only apply to Import Declaration Forms registered from July 1, 2026, to avoid disrupting shipments already at sea.
The council said it continues to work with the IRA and KRA to support businesses as they transition to the new framework.
Business organisations including KAM, the Kenya Private Sector Alliance (KEPSA) and SCEA have previously warned that compulsory local insurance could increase import costs, reduce flexibility for companies covered under global insurance programmes and create delays if digital systems encounter technical problems.
The directive continues to face opposition from some importers, particularly motor vehicle dealers.
Car Importers Association of Kenya (CIAK) National Chairman Peter Otieno argued that imported vehicles are already protected by comprehensive international marine insurance arranged before shipment.
He maintained that requiring importers to purchase additional local cover results in duplicate insurance without providing added value to businesses or consumers.
Despite the concerns, compliance with the new regulations is now integrated into KRA’s customs clearance system. Importers must present a digitally verified Marine Cargo Insurance certificate issued by a locally licensed insurer before their goods can be cleared.
