Twelve (12) private insurers (“Private Insurers”) won licences and have been given conditional approach from the state-owned insurer Myanma Insurance (“MA”) and the Insurance Business Supervisory Board (“IBSB”) to start operations from June 2013 (and must do so within 12 months). MA and IBSB received 20 applications to operate insurance companies but approved only 12 (all of which are local insurers – foreign insurers are not currently allowed to operate in Myanmar). The approved Private Insurers are as follows:
- Apex Insurance International Company;
- IKBZ Insurance Public Company;
- Great Future International Insurance Company;
- Capital Life Ltd Insurance Application;
- Global Standard Insurance Public Company;
- Green Asia Insurance Company;
- Jade King and Queen Service Company;
- Mya Wady Insurance Company;
- Pillar of Truth Insurance Company;
- Citizen Business Insurance Company;
- Ayeyar Myanmar Insurance Company; and
- Myintmo Min Insurance Company.
Of these Private Insurers, 3 plan to offer life insurance, which requires paid-up capital of Myanmar Kyat (“MMK”) 6 billion (US$7 million), and the remaining 9 plan to offer both life and general insurance, which requires a total capital of MMK46 billion (US$53 million).
The approval given is conditional, pending the Private Insurers meeting paid-up capital requirements and depositing funds with the Myanma Economic Bank. The Myanma Economic Bank, will then check whether the relevant tax has been paid, and determine the source of the paid-up capital is legitimate. The Myanma Economic Bank will return 60 percent of the paid-up capital to the Private Insurers to allow them to use it for their operations and retain the remaining 40 percent in case the relevant Private Insurer is unable to meet its obligations.
The Myanmar financial industry is still underdeveloped and is mostly represented by banks. This is due to tight controls exercised by the government. With the commencement of the Private Insurers’ operations in Myanmar, an association for insurance firms will be set up and the Myanmar Insurance Law will be amended.
Additionally, on 23 April 2013, the European Union lifted sanctions on Myanmar in recognition of a wave of political and economic reform.