In an attempt to improve the efficiency of the insurance sector (“Sector”) and improve the quality of the insurance services and products offered to consumers by underwriting new risks, Capital Market Authority (“CMA”) in Oman had made some essential amendments to the insurance law (“Law”) through the issuance of Sultani Decree number 39/2014 in relation to the legal form of the companies required to conduct insurance business in Oman and the share capital requirement.


The Sector is mainly regulated by the Law and its implementing regulation. The new amendments include the following:

  1. That the form of the company must be a public joint stock company with an issued share capital of OMR 10,000,000 compared to OMR 5,000,000 before the amendment. The minimum requirement of the share capital of public joint stock company is OMR 2,000,000 under the provisions of the Commercial Companies Law. Minimum of 40% of the share capital of a public joint stock company needs to be floated and this shall apply to insurance companies when converting its legal form within a period of three years. A number of commentators do not foresee any challenges or difficulties in satisfying the new requirements of the Law and the CMA, as a regulator, has paved the way for such amendments previously, and most insurance companies have sufficient liquidity.
  2. The new applicants or the existing insurance companies have the right to appeal the decision of the executive president’s decision rejecting the new application for establishment of insurance companies or its conversion before the appeal committee at the CMA within sixty days from the date of rejection pursuant to the procedures stipulated in the Law and its implementing regulations. This requirement shall not be read in isolation from the requirement set out in Article 3 of the Law which gives the executive president of the CMA the discretion if the national economy of Oman actually requires more insurance companies which could be used as one of the grounds for rejecting an application. This is not likely to be the case for the insurance companies which have already got a license but are subject to the new amendments by converting to a public joint stock company and increase of share capital to OMR 10,000,000.
  3. The penalties for breaching the provisions of the Law will amount to at least OMR 10,000 but not more than OMR 100,000. The penalties are seen by people in the Sector to be on the high side. Reading these penalties with the other penalties set out in the Capital Market Law and its implementing regulation that are applicable to public joint stock companies considered being in the same lines. This is mainly because it is a public listed company which is subject to more disclosure and transparency rules. 
  4. A new power has been granted to the board of directors of CMA to be able to settle the crimes set out in the Law or its implementing regulations or decisions issued implementing its provisions during the course of the public suite before the issuance of a ruling against a payment of an amount not less than double the minimum amount of the fine for the crime but it does not exceed the double maximum amount. If a settlement is reached then the public suite shall be closed. Clearly the CMA still, as a regulator is trying to minimise the number of crimes that are to be dealt with by the court which is beneficial to companies working in the Sector in terms of time and cost involved in the judicial procedures.


About two third of insurance companies in the Oman market will be affected by the new amendments and will need to comply with the amendments within a period of three years. It is not clear how the new amendments will be accommodated with the new Islamic Insurance law (“Takaful”), which is in the process of being drafted by the CMA. Given the fact that Takaful will be a law on its own, existing insurance companies will not be permitted to open windows for Islamic products.

The Sector has been liberalised in recent years by the amendments to the Law made by the CMA. Parallel to this, underwriting by insurance companies has started in other areas of investment such as health insurance, whereas areas such as car insurance have seen a decrease in recent years.

Property insurance is also on the rise following Cyclone Gonu’s impact and damage caused to properties and infrastructure in the capital, Muscat and other areas in Oman. Nonetheless, yearly announcements of the possibility of natural disasters occurring have also contributed to rise of property insurance.