The Myanmar government has made a long awaited move towards granting licences to foreign companies wishing to operate life and non-life insurance businesses in the country.
The Ministry of Planning and Finance (MOPF), in an announcement, said it is inviting expressions of interest and request for proposals from companies looking to operate in the country that will be assessed by the Financial Regulatory Department.
The MOPF’s decision will open the way for companies wishing “to operate the business of insurance, underwriting agency or insurance broking with foreign investment” to open for business in the country”, reported Myanmar Times.
The MOPF specifies that insurers must fall into one of two categories—life insurance and non-life insurance .
According to the announcement, foreign life insurers are given two options for operations in the country. The first option allows not more than three licenses for foreign life insurers to operate as wholly owned subsidiaries. The second allows foreign life insurers with a representative office in Myanmar to form a joint venture with a local life insurer.
In the non-life sector, only foreign insurers with representative offices in Myanmar may partner with local insurance companies. No fully foreign-owned non-life insurers will be granted permission to operate in Myanmar.
“Local composite insurers have been mandated by the MOPF to operate as separate life insurance and non-life insurance entities paving the way for foreign entities to associate or partner with local insurers as applicable,” the statement said.
The move comes amid efforts to “accumulate the investment needed for the country’s economic development, and to develop the non-banking financial sector,” according to the statement.
Since 2013, 11 local insurers have been granted licences to operate, while 14 foreign insurers have set up 30 representative offices in the country. Three Japanese companies have special permission to operate non-life insurance businesses in the Thilawa Special Economic Zone near Yangon.
In Myanmar, insurance penetration is still just under 0.1%, the lowest in the region.