Foreign insurers will be allowed into Special Economic Zones in January, though the exact rules governing their operations are still being discussed, said deputy finance minister U Maung Maung Thein.
Companies will be selected based on their adherence to international standards, as well as their responsibility in social affairs, and will be required to have significantly more capital invested than local firms operating domestically.
“These companies are running around the world – so their capital is many times higher than locals,” he said.
While the firms will be allowed into Special Economic Zones, they won’t be able to enter the domestic insurance sector yet. U Maung Thein said most insurance companies allowed into the zones are likely to specialise in fire insurance, as least initially.
The move comes to encourage foreign investors to set up shop on Thilawa, Dawei and Kyaukphyu SEZs.
Myanmar’s banking sector has drawn global headlines as it has given nine conditional licence approvals to foreign banks to set up shop in the next year. The tendering processes was limited to banks with domestic representative offices.
Several foreign insurers, from places like the US, Japan, Canada and Korea, have opened representative offices in Myanmar, with many anticipating a possible future licensing round for foreign insurance companies as well.
However, a formal timeline has not yet been announced for the possible tender.
Speaking about the insurance companies that will be allowed to operate on the SEZs, U Maung Thein said there will be fixed criteria to meet. The number of companies has not yet been determined, but it will be no more than a handful.
One issue still being discussed is the level of funds foreign insurance companies must hold “in trust” inside the country, said U Maung Thein.
The trust accounts will be kept by the government in case there is a large reason to pay out, in which case the funds will be returned to the companies.
If the reputation of the companies is strong enough, there may be less need for these accounts, he added.
Myanmar insurance companies will also be allowed to run at zones, though as a branch office. They will be required to inform the Insurance Business Supervisory Board before opening offices.
Source: MYANMAR TIMES