Annual general report of the controller and - Parliament of Tanzania

Furthermore, throughout the period between 20
February 2003 and 24 July 2007, there were
renewals/upgrades of policies, change of insurers
and changes to premium rates which are not
supported by relevant endorsements, or addendums
policies, or replacement cover notes issued by the
identified insurers. Again in these cases, the Bank
has relied on letters and invoices from its broker to
effect the transactions.
(ii) Excessive premium rates charged
Based on the original insurance policies, the agreed
rate of premium rates were 0.45% for CAR-Main.
However, in subsequent upgrades and renewals the
Bank was charged insurance premiums at higher
rates of 0.91 to 0.96 %. Moreover, as stated above
these renewals and upgrades were not supported by
relevant endorsements, or addendums policies,
issued by the identified insurers.
The CAR Insurance premium quoted in the original
policy document was US$ 516,250 comprising:
CAR- Contract work US$ 335,700
CAR – Public liability I US$ 130,550
CAR – Public liability II US$ 50,000
We observed that while the rate of premium for CAR
public liability I policy was agreed at 0.175 % i.e.
US$ 26,250, the actual amount indicated in the
policy document was US$ 130,550. This was
excessive by US$ 104,300 but neither the Broker nor
the Bank identified and correct the apparent
mathematical error in the policy document.
However, eventually the Bank was billed a premium
of US$ 679,500 by the Broker and which was duly
paid. No explanation provided on the reasons for the
higher bill. If the error is considered, the potential
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Office of the Controller and Auditor General PA&oBs 2007/08 145