In a significant and long-awaited step forward for the Myanmar insurance sector, on 2 January 2019, the Ministry of Planning and Finance (MPF) officially announced its plans to open up the life and non-life insurance sectors to foreign insurers. Further details of the liberalisation, including the insurance licence application process and timetable, were subsequently issued by the Financial Regulatory Department (FRD) of the MPF on 18 January 2019.
This represents a major milestone in opening up the insurance sector for Myanmar's population of approximately 50 million people. To date, the sector has been dominated by the government-owned insurer, Myanma Insurance, with only a handful of foreign insurers being permitted to operate limited non-life insurance business in the Thilawa Special Economic Zone.
What insurance licenses are available under the new regime?
(1) Life Insurance:
- Up to 3 licenses are available for life insurers who are 100% foreign-owned subsidiaries of foreign insurance companies
- Licenses are also available for joint ventures between a local life insurance company and a foreign life insurer with a life or composite representative office in Myanmar as at 31 December 2018. The foreign insurer can hold up to a maximum of 35% of the joint venture's shares.
(2) Non-life Insurance:
- Licenses are available for joint ventures between a local non-life insurer and a foreign non-life insurer with a non-life or composite representative office in Myanmar as at 31 December 2018. As above, the foreign insurer can hold up to a maximum of 35% of the joint venture's shares.
(1) Applicants wishing to establish a 100% wholly-owned life insurance subsidiary in Myanmar:
- must apply using the prescribed application form in accordance with the request for proposal (RFP) issued by the FRD on 18 January 2019 (an English language copy of which can be found at www.frd.gov.mm);
- must submit their application, together with the required supporting documents, and pay the (non-refundable) USD 60,000 application fee, to be received by the FRD by no later than 12.00 (Myanmar time) on 1 March 2019;
- must be the immediate or ultimate holding parent company of the proposed Myanmar life insurance operation and must hold a license to carry on insurance business in their home countries;
- do not need to have an existing representative office in Myanmar;
- must provide various supporting documents and information with their application, as further set out in the RFP, including (without limitation):
○ a commitment letter from a bank or insurer satisfactory to the MPF
○ a capital commitment letter, as per RFP Schedule 8;
○ the application form, as per RFP Schedule 7, and accompanying power of attorney for the person submitting the form (if needed);
○ a certified true copy of the home country insurance licence;
○ details of all proposed key appointments, including the chief executive and certifying actuary, as per RFP Schedule 11;
○ a copy of the feasibility study conducted in respect of the proposed Myanmar operations;
○ a copy of the 'Completeness and Conformance Checklist', as per RFP Schedule 5;
○ a copy of the 'Statement of Non-Compliance or Deviation', as per RFP Schedule 6; and
○ a copy of the 'Business Plan' and associated information on the applicant's global operations and proposed Myanmar operations, as per RFP paragraph 7.9.
(2) Applicants wishing to establish a joint venture with a local insurer, in either the life or non-life insurance sector:
- must apply through an application made by a local Myanmar Insurer, using the prescribed form in accordance with the relevant life or non-life expression of interest invitation letter (EOI) that was issued to all local insurers in Myanmar on 18 January 2019 (an English language copy of which can be found at www.frd.gov.mm);
- applications must be submitted, together with the required supporting documentation, and received by the FRD before 12.00 (Myanmar time) on 11 February 2019. Follow up application forms, if relevant, must be received by 12.00 (Myanmar time) on 26 April 2019 (this process applies to local insurer applicants who do not initially mention a foreign JV partner but subsequently seek to form a joint venture with eligible foreign insurers, including eligible insurers that applied for but were not selected for the 100% foreign life insurer licence mentioned above);
- must provide various supporting documents and detailed information in respect of the foreign joint venture party and its group, as further set out in the EOI, including (without limitation);
○ a declaration about the accuracy of the information relating to the foreign JV partner contained in the application, signed by a CEO or director;
○ a certified true copy of the JV partner's home country insurance licence;
○ ultimate beneficial shareholder details, wider group structure chart and operational information, financial information and other information on the foreign JV partner's global operations, as further described in EOI Section III; and
○ information on the JV's proposed Myanmar operations in accordance with EOI Section IV, and
- the foreign joint venture party must have a local representative office registered for life, non-life or composite insurance business in Myanmar (as applicable depending on the license being sought) as at 31 December 2018.
Other application points to note:
Licensing Timetable for 100% Wholly-owned Life Insurance Subsidiary Applications