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Myanmar Opens Up Insurance Sector to Foreign Investors

Myanmar Opens Up Insurance Sector to Foreign Investors

January 15, 2019

In another exciting development in the Myanmar financial regulatory landscape, foreign life and non-life insurers can form joint ventures with local life and non-life insurers respectively. In addition, up to 3 (three) licenses will be granted to foreign life insurers to operate as wholly-owned subsidiaries. Therefore, foreign insurers will now play a much more active role in the insurance sector.

This was announced by the Ministry of Planning and Finance (the “MoPF”)) on 2 January 2019 by way of Announcement No. (1/2019) (the “Announcement”) which grants permission to foreign insurance companies to operate in Myanmar and extend insurance services to Myanmar citizen.

The existing insurance regime

As the reader may already be aware, since 2013 there are presently 11 local insurers and 32 foreign insurers operating in Myanmar. However, prior to the Announcement, foreign insurers were only permitted to open Representative Offices in Myanmar.

Through the Announcement, the MoPF has made good on a promise made on 7 June 2017, when Dr. Daw Sandar Oo, Managing Director of Myanma Insurance, outlined the expected reforms by the MoPF (which oversees Myanma Insurance) in a presentation at Myanmar Investment Forum 2017, indicating that the insurance sector will open up to foreign insurers, allowing them to underwrite and sell policies in Myanmar. In this presentation she announced that a blueprint for insurance market reforms will be published by the MoPF, which has been finalised with the assistance of the World Bank Group, within the next three months.

The reader may please refer to VDB Loi’s earlier article on the proposed reforms titled “Myanmar to open up insurance market to foreign investors” here: http://www.vdb-loi.com/mlw/myanmar-to-open-up-insurance-market-to-foreign-investors/

Salient features of the Announcement

The Announcement references Section 29 of the Insurance Business Law, 1996 which states that “The MoPF may, with the approval of the Government, grant permission to a company which wishes to operate the business of insurance, underwriting agency or insurance broking with foreign investment.”

Towards this end, the MoPF has published the Myanmar Insurance Sector Liberalisation Roadmap (the “Roadmap”), which is likely to be available on its website later this month. The Roadmap appears to be the long-awaited blueprint that Dr. Daw Sandar Oo spoke of at the Myanmar Investment Forum 2017, but the exact contents remain to be seen.

Local composite insurers to split

Existing local composite insurers (of which there are 8) have to bifurcate into life insurers and non-life insurers. This means there will now be 11 local life insurers and 8 local non-life insurers. Foreign life and non-life insurers must then form joint ventures with local life or non-life insurers, respectively.

Split only to form JV?

It is likely that local composite insurers must bifurcate regardless whether they intend to form joint ventures with foreign insurers or not, in order to be supervised more efficiently and for tax purposes. It is understood that most of the local composite insurers have already submitted split plans.

Wholly foreign owned life insurers

When it comes to life insurance, (up to) three foreign insurers will be given the license to go it alone without partnering with local life insurers. Save these three, all other foreign life insurers, (and indeed all foreign non-life insurers), must form joint ventures with local insurers.

Conditions for obtaining license

A foreign insurer must have a representative office as a precondition for being granted a license. Further, in order to apply for an insurance license, the MoPF invites both local and foreign insurers to submit the Expression of Interest (“EoI”) and / or the Request for Proposal (“RfP”). It is understood that the difference between the two is that the EoI is applicable when an insurer intends to form a joint venture, but when a foreign life insurer wants to go it alone, there is a requirement of submitting the RfP. The formats of the EoI and the RfP along with details of the submission deadline for the EOI and RfP process are expected to be available on the MoPF website on 15 January 2019.

What about insurance broking?

While Section 29 of the Insurance Business Law, 1996 includes insurance broking in its ambit, the Announcement has nothing for brokers, whether foreign or local. It may be noted that there are presently no local brokers, but 11 foreign brokers with Representative Offices in Myanmar. It is understood that there is a plan to initiate a licensing process for brokers, but only after the process for insurers is complete.

Any grey areas yet to be clarified?

It was indicated earlier that foreign insurers would require an MIC permit to operate, however there is no clarity on this issue at present. It was also indicated earlier that the minimum capital requirement will be the same for local and foreign companies, as the government wants to ensure a “level playing field”. The present minimum capital requirements, being for life insurance business MMK 6 billion, non-life insurance MMK 40 billion and composite insurance MMK 46 billion, are being reviewed and shall likely be reduced.

At present there is no visibility on the foreign ownership cap for joint ventures, but this is also expected to be available on the MoPF website on 15 January. It was indicated earlier that a minimum shareholding of 35% shall be fixed for the local partner, which means that the foreign company shall be allowed to have majority shareholding (up to 65%).

Finally, the eligibility criteria for foreign insurers remains to be seen. It is expected that the criteria would be in line with the criteria specified in Notification No. 2/2017 for foreign insurers operating in Special Economic Zones (“SEZ”) of Myanmar such as Thilawa, being (i) the foreign insurer should be in operation for at least ten years; (ii) have a total asset value or paid up capital of at least USD 1 billion in Myanmar; and (iii) have a rating of S&P (B+) or its equivalent. There are at present 3 foreign insurers operating in SEZ, all of which are Japanese companies operating in Thilawa.

Insurance experts

As a follow-up to the Announcement, the Financial Regulatory Department (“FRD”) of the MoPF released a notification on 11 January 2019 (“Notification 7/2019”) with regard to criteria for appointment of insurance experts in the Insurance Business Supervisory Board (“IBSB”). More such notifications and clarifications are expected in the coming days.


All-in-all, the Announcement is a very welcome step, as foreign insurers with Representative Offices, who had practically resigned themselves to their fate, can breathe a sigh of relief and gear up for doing business. The Announcement has far-reaching implications for the insurance sector and stakeholders can expect a flurry of activity in the near future.