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Corrupt Monopoly: Why the Insurance Commission Selected Amanah to be the Sole Insurer at Berbera Port and Customs

The chairman of the National Insurance Commission Mr. Saleban Awad Ali (Bukhaari), in a directive, announced that Amanah Insurance is the sole company that is authorized by the Somaliland government to provide insurance coverage to all vehicles in customs and all vehicles and trucks, need to access the Berbera port. 

This is the first time automobile insurance is being implemented in Somaliland a necessary security instrument that shifts risk from an individual or a family to a company but Mr. Bukhaari’s directive has attracted an unwanted attention to the infant insurance commission and industry mainly by the selection of Amanah Insurance as the single company allowed to provide insurance coverage in Berbera – the country’s only port and single largest economic generator. 

Enforcement of legal mandates governing vehicles such as motor vehicle safety inspection, road tax, and the driving license has been an issue in Somaliland.

Proof of insurance will run into the same issue but for the system to cover risks and stay viable it will need the maximum number of subscribers but at the moment National Insurance Commission’s only method is tie access to the port or the customs clearance of imported vehicles to a purchase of an insurance policy.

Car dealerships were the first to sound the alarm on the mandate to have all vehicles insured before being cleared in customs. The Insurance Commission’s directive does not differentiate dealerships from vehicles imported by private citizens and it is unclear if dealerships will recoup the cost of the insurance from car buyers.

Another issue that arose from the public debate about the chairman’s letter is the fact that laws that govern insurance such as minimum coverage for bodily injury or property damage resulting from automobile accidents do not exist and that the Insurance Commission itself needs much of its functions defined. In addition, it is unclear how long it will take Amanah to become solvent to cover its customers.

Amanah Insurance’s was launched in Hargeisa in February 2021, precisely one month after President has appointed the insurance Mr. Bukhari.

There isn’t much to go on in terms of history or track record in the insurance industry is not clear especially in assessing its ability to pay up when its customers need for the coverage they paid for and it is unclear if the company has deep-pocketed underwriters that guarantee its solvency to shoulder the responsibility of covering life and property damages in a country where the leading cause of death is motoring related.

Mr. Bukhari, the chairman of the Insurance Commission, responding to criticism of his decision for picking Amanah to ensure all customs and port traffic, stated the decision was made solely by the commission after carefully reviewing existing insurance companies and has insisted that the highest levels of government, presumably President Bihi, has been consulted.

The commissioner did not elaborate on selection criteria that qualified Amanah and disqualified others, but added that allowing multiple companies to provide insurance at the port would be chaotic and untenable.

According to sources, Mr. Bukhari and the Insurance Commission have stifled renewing other insurers operating licenses despite some willingness to pay a two million dollar license fee the commission has demanded. Somaliland Chronicle is unable to confirm these allegations.

What does Amanah Insurance share with GEOSOL?

Although you may not have heard of Amanah Insurance company before chairman Bukhari’s letter, its principals, including the chairman and other members of the Board of Directors, are part of another predatory business interest known as GEOSOL.

GEOSOL is the company that is co-owned by former Mayor Mr. Abdirahman Aideed SOLTELCO that has the exclusive contract to manage Hargeisa’s land and property records at an exorbitant fee.

Meet Mr. Abdikarim Gas, the Managing Director of Amanah Insurance, and Mr. Ibrahim Yusuf Isse member of the board of directors. While it is not illegal in Somaliland to be involved in multiple business interests that provide different services to the public, GEOSOL and its owners including the former Mayor of Hargeisa Mr. SOLTELCO are part of a new and carefully crafted form of corruption designed to drain the public in perpetuity often with the complicity of public officials. 

Mr. Abdikarim Gas, whose brother Mohamed Ahmed Gas owns 9.25% of GEOSOL was himself a witness on the contract that formed the firm on December 9th, 2017. While Mr. Ibrahim Yusuf Isse owns a similar amount of 9.25%.

The nexuses between Amanah Insurance and the unsavory characters from GEOSOL coupled with the rushing of implementing one of the most complicated financial instruments before relevant laws are in place is problematic and seems to be yet another scheme to enrich private individuals who are essentially holding the Berbera port hostage.

The Insurance Commission and Amanah officials did not respond to request for comments for this article.

Read GEOSOL’s agreement with Hargeisa Municipality ownership documents and its schedule of fees below.

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Notice: This is an article by Somaliland Chronicle. It is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Under this license, all reprints and non-commercial distribution of this work is permitted.

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