New rules have been announced relating to the funds required by an overseas insurance company, when operating in Myanmar. In the past, the capital fund required was set at $1 billion based on their operations in Myanmar. Although this figure remains unchanged, the insurer can now include the funding on their total operations, including figures from overseas. There has for some time been a call for change, due to what was seen as a high benchmark.
At present foreign insurance companies can only operate in the Special Economic Zones in Myanmar. In 2015 three insurance companies from Japan were awarded operational licences. More recently, reports have stated that further licence requests have been received from local and overseas insurance companies.
In October 2016, local sources disclosed that the government planned to open the market to foreign insurers during 2017. It was also said that the government planned to reduce restrictions on local firms, who until now have been required to offer only pre-defined products at standard prices. Furthermore, The Financial Regulation Department, under the Ministry of Planning and Finance, would present a ‘road map’ for insurance liberalisation.
Currently, insurance and insurance broking business must be conducted through either a company incorporated in Myanmar or a company established outside Myanmar with an established place of business in Myanmar.
Until 2013, Myanma Insurance was the sole insurer in Myanmar, and is the state-owned insurance company, founded in 1952. The Insurance Business Supervisory Board, which reports to the Ministry of Finance and Revenue, is responsible for licensing insurers, underwriting agents and insurance brokers. Myanma Insurance performs the work of the Supervisory Board.
There are reports that the Ministry of Planning and Finance will also introduce changes that would authorise foreign insurance companies to serve customers who are not within the Special Economic Zones. The Ministry is mandated “to formulate and implement effective monetary and financial policies to meet new political, economic, social, and other development objectives laid down by the State”. The ongoing growth in the Myanmar economy is leading to changes in rules for the insurance sector, together with an increasing demand for insurance services.
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