Myanmar’s Insurance Business Regulatory Board has recently announced a program of reform for Myanmar’s insurance sector, expected to allow foreign insurers to do businesses in Myanmar in the very near future.
The program of reforms is expected to open the following activities, among others, and within limited conditions, to foreign insurers:
- Sale of life and non-life insurance policies to the general public;
- Underwriting a wide range of insurance products and services; and
- Insurance brokerage and agency.
Life insurance activities are expected to be opened to companies with 100% foreign ownership, while foreign insurance companies seeking to carry out non-life insurance activities will likely have to partner with a local company. Under the Myanmar Companies Law 2017, which is already in force, they will be able to form a joint venture with one of Myanmar’s existing licensed insurers and hold shares of up to 35%.
With very limited exceptions, foreign insurance companies have been completely barred from offering their services in Myanmar for over 50 years, and may currently only have a local presence by way of a representative office. There are currently 11 local insurance providers licensed to operate in Myanmar, and in practice a single state-owned enterprise holds a near-total monopoly on insurance activities. This liberalization is therefore an extremely substantial reform, and could unleash the significant untapped potential of this nascent industry.
The program of reform is due to be implemented during the 2018-19 fiscal year (which commences on October 1, 2018). Tilleke & Gibbins will closely monitor this ongoing legal development and provide updates as details emerge.