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Myanmar permits reinsurance, new categories for general insurance

Myanmar has permitted the business of reinsurance and three new categories of general insurance in the country under two new directives – (4/2020) and (6/2020) – issued by the Insurance Business Regulatory Board (IBRB) on May 12.

The three new categories are: Industrial All Risk, Construction All Risk/ Erection All Risk, and Bailee’s Liability Insurance.

The aim is to widen insurance coverage in the country. “Whether local or foreign, businesses need insurance coverage under these three categories. We have permitted the three new policies nationwide, including in Thilawa Special Economic Zone,” said U Thant Sin, directors at the Financial Regulatory Department under the Ministry of Planning, Finance, and Industry.

“All three types of insurance are widely used in business internationally. We usually receive enquires from foreign investors about the availability of these insurance products,’’ said U Soe Win Thant, joint secretary of the Myanmar Insurance Association.

He added that in Thilawa SEZ, businesses are required to hold these insurance products and this should be a requirement for all companies doing business in Myanmar.

The new general insurance products will be launched in Myanmar from October onwards.

The IBRB has also permitted insurance companies to provide reinsurance services. “Being able to reinsure the business of other providers will make it easier for insurance companies to operate,’’ U Soe Win Thant said.

The purpose of permitting reinsurance is to maximise retention within the country, subject to proper and adequate diversification of risk, secure the best possible reinsurance coverage required to protect the interest of policyholders at a reasonable cost, and for the industry to develop technical capability and financial capacity.

The IBRB also issued Directive (5/2020) on existing insurance policies in Thilawa SEZ.

According to the directive, three Tokyo-based insurance companies, which were granted provisional permits to operate in Thilawa SEZ under joint ventures with local general insurance companies from November 2019, will halt underwriting new policies from October 1 onwards.

They will be able to maintain the liabilities for existing insurance policies until the end of the policies’ terms.

The joint venture companies are AYA SOMPO Insurance Company, Grand Guardian Tokio Marine General Insurance Company, and KBZ MS General Insurance Company.

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Source : Myanmar Times

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