Insurance laws Myanmar
Myanmar's insurance legal framework has undergone significant changes in recent years, moving from a state monopoly to allowing private and foreign participation. Here's a breakdown of the key aspects:
1. Primary Laws and Regulations:
Myanma Insurance Law (1993): This was the foundational law that established Myanma Insurance (MI) as the state-owned monopoly. While private and foreign companies are now allowed, this law still dictates certain compulsory insurances and the overall structure.
The Insurance Business Law (1996): This law paved the way for private sector participation in the insurance industry and established the Insurance Business Supervisory Board (IBSB).
Directives and Rules: The IBSB issues various directives and rules to regulate specific aspects of the insurance business, including:
Directive for Insurance Agents
Bancassurance Directive
Directive for Approval of Insurance Products
Reinsurance Directive
Directives concerning existing insurance policies in Special Economic Zones (e.g., Thilawa SEZ).
Contract Act 1872: General contract principles from this act also apply to insurance contracts in Myanmar.
2. Key Regulatory Bodies:
Ministry of Planning and Finance: Oversees the overall financial sector, including insurance.
Insurance Business Supervisory Board (IBSB): This is the main regulatory body for the insurance industry. Its duties include:
Scrutinizing and deciding on applications for business licenses (insurers, underwriting agents, brokers).
Determining capital requirements for insurers.
Setting principles for asset and liability valuation.
Determining investment limits for insurance funds.
Promoting insurance education and technology.
Myanma Insurance (MI): While no longer a sole monopoly, MI remains a significant state-owned insurer and plays a role in the administration and support of the IBSB.
3. Types of Insurance Businesses:
The Insurance Business Law permits companies to apply for licenses in various classes of insurance, including:
Life Assurance
Fire Insurance
Comprehensive Motor Insurance
Cash-in-transit Insurance
And other classes as permitted by the Ministry of Planning and Finance.
4. Compulsory Insurances:
Myanmar has certain compulsory insurance requirements:
Compulsory Life Assurance for Government Servants: This must be effected with Myanma Insurance.
Compulsory Third Party Liability Insurance for Motor Vehicles: Owners of motor vehicles must effect this with Myanma Insurance.
Compulsory General Liability Insurance: Entrepreneurs or organizations operating enterprises that may cause loss to state-owned property, damage to public life and property, or environmental pollution, must effect this.
Third-Party Liability Insurance for Large Buildings: New regulations require owners/occupiers of high-rise, large, or extra-large buildings to apply for third-party liability insurance during construction, modification, relocation, demolition, and for ongoing usage (e.g., public assembly buildings, large hotels).
5. Market Landscape:
Historical Monopoly: For a long time, Myanma Insurance held a monopoly.
Liberalization: Myanmar has gradually liberalized its insurance market, allowing private domestic companies and, more recently, foreign insurance companies to operate.
Foreign Participation: Initially, foreign companies were primarily involved in reinsurance or as representative offices. The market has been opening up for direct insurance business, but with specific regulations and requirements. Foreign investors are generally required to purchase insurance from Myanma Insurance for certain activities.
Capital Requirements: Specific minimum capital requirements are in place for life, general, and composite insurance businesses.
Investment Restrictions: Insurers and underwriters are required to maintain deposits at government-owned banks and purchase government treasury bonds.
6. Contract of Insurance:
Myanmar law does not explicitly define "contracts of insurance" in detail, relying on the general Contract Act 1872. However, directives define "insurance policy" as an insurance contract.
The "fortuity principle" (that an event must be a known risk) is applied.
An insurance contract entered into without insurable interest is considered void.
7. Ongoing Reforms:
Myanmar's insurance sector is still developing, and reforms are ongoing to modernize the market and align it with international standards. This includes updates to laws and regulations to facilitate further growth and foreign investment.
For the most up-to-date and specific details on Myanmar's insurance laws, it's always advisable to consult with legal professionals specializing in Myanmar law or refer directly to the official publications of the Myanmar government and the Myanma Insurance website.
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