Page 23 - Insurance Times August 2020

Regulatory framework
The two main laws regulate the insurance business in
Myanmar are the:
Y Myanmar Insurance Law of 1993, including the Third
Party Liability Insurance Rules for Myanmar Insurance.

Y Insurance Business Law of 1996, as amended in 2015,
for the private insurance sector, which mandates
following basic regulatory principles:
o formation of the IBRB;
o establishment and licensing: public or private
limited companies must obtain a license from the
IBRB before operation;
o capital, deposit, reserve, and funds requirement;

o restriction on license transfer;
o approval requirement for policy and premium; Y Reinsurance capacity to be developed within country
by maximising retention along with proper and
o liabilities of insurers, underwriters, and brokers;
adequate diversification of risks.
o auditing;
Y Best possible reinsurance coverage to protect interests
o liquidation; of policyholders, cedants at reasonable cost.
o administrative actions; and Y Adequate technical capability & financial capacity to be

o penalties for non-compliance. developed.
Y Simplify the reinsurance business.
The other regulatory bodies that oversee the licensing of
Y Every insurer & reinsurer shall maintain & maximise its
insurance businesses and activities both for domestic and
retention calibrating its financial capacity, quality of
overseas insurance companies in Myanmar are the:
Y Financial Regulatory Department (FRD) risks & volume of business.
(www.frd.gov.mm) under the Ministry of Planning and Y Every insurer & reinsurer shall formulate suitable
Finance (MoPF). retention programme for each insurance segment.

Y Insurance Business Regulatory Board (IBRB). Y 20% of sum at risk for each life insurance business
Y the Directorate of Investment and Company portfolio shall be maintained by every insurer &
Administration (DICA) under the Ministry of Investment reinsurer.
and Foreign Economic Relations (MIFER) regulates Y Every insurer shall commence annual reinsurance
company registration for all companies operating in program for every financial year and shall submit its duly
Myanmar. approved reinsurance programme by Board of directors
to IBRB.
Reinsurance Directive No. 4/2020 Y After beginning of financial year, within 30 days,
Presently, Myanma Insurance company is authorised to approved final reinsurance with declaration by the CEO
transact reinsurance business in Myanmar. Private insurance that entity has not made any change in earlier filed
companies cannot provide reinsurance. New reinsurance program.
directives will bridge the protection gap and increase the
Y In case of any revision, such revised programme duly
insurance penetration in the country.
approved by board along with justification, reasons shall
be submitted to IBRB within 15 days.
In pursuant to the power conferred to Insurance Business
Regulatory Board (IBRB), issued reinsurance directive which Y While finalising reinsurance programme, each insurer
will come in to effect from 01 Oct 2020. The highlights of and reinsurer shall consider the following matter.
the directive are:- o Parameter considered for fixation of retention

The Insurance Times, August 2020 23