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MYANMAR INSURANCE
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by Location and Area of Practice.
Myanmar Insurance incorporated in 1952, Myanmar Insurance with its
network 0f 38 branches established all over Myanmar, including one
divisional/state office in each capital city of 14 States and
Divisions is the Sole State-Owned Insurance Organization in Myanmar.
The classes of insurance are as follows:---
• Life insurance
• Marine insurance
• Aviation insurance
• Travel insurance
• Engineering insurance
• Fire insurance
• Miscellaneous insurance
• Third Party Liability insurance
• Comprehensive Motor insurance
• Oil and gas insurance
• Reinsurance
THE UNION
OF MYANMAR THE STATE LAW AND ORDER RESTORATION COUNCIL
THE INSURANCE BUSINESS LAW
Chapter I
Title and Definition
Chapter II
Objectives
Chapter III
Formation of the Insurance Business Supervisory
Board
Chapter IV
Duties and Powers of the Supervisory Board
Chapter V
Application for Business Licence and Granting
Thereof
Chapter VI
Duties of an Insurer, Underwriting Agent or
Insurance Broker
Chapter VII
Audit
Chapter VIII
Cancellation of Business Licence
Chapter IX
Liquidation
Chapter X
Taking Administrative Action
Chapter XI
Offences and Penalties
Chapter XII
Miscellaneous
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The State
Law And Order Restoration Council
The Insurance Business Law
(The State Law and Order Restoration Council Law No. 6/96)
The 9th Waxing of 1st Waso, 1358 M.E. (24th June, 1996)
The State Law and Order Restoration Council hereby enacts the
following Law: -
Chapter I
Title and Definition
1. This Law
shall be called the Insurance Business Law.
2. The following expressions contained in this Law shall have the
meanings given hereunder: -
(a) Insurance Business means the insurance business permitted to be
transacted under section 8 of this Law;
(b) Insurer means a company which transacts insurance business;
(c) Underwriting Agent means a company which has the right to
underwrite on behalf of an insurer;
(d) Insurance Broker means an intermediate company which makes
contact with an insurer in the interests of the insured in the
interest of the insured in effecting insurance;
(e) Company means a company which has been constituted under the
Myanmar Companies Act or the Special Companies Act, 1950;
(f) Ministry means the Ministry of Finance and Revenue; Supervisory
Board means the Insurance Business Supervisory Board formed under
section 4 of this Law.
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Chapter II
Objectives
3. The
objectives of this Law are as follows: -
(a) to coatribute towards the development of the system of market
economy of the State;
(b) to develop foreign and local investments;
(c) to pave the way for insurance business, underwriting agency
business or insurance broking business in the private sector;
(d) to win the trust and confidence of the people in the insurance
system by providing the various insurance coverages which may be
required in accordance with the all-round development of the State;
(e) to cause the technology and business of insurance to thrive and
be outstanding.
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Chapter III
Formation of the Insurance Business Supervisory Board
4. The
Ministry -
(a) Shall form the Insurance Business Supervisory Board comprising
the following persons: -
(1) a person assegned by the Ministry Chairman
(2) a representative of the Central Bank of Myanmar Member
(3) a representative from the Office of the Attorney-General Member
(4) a representative from the Office of the Auditor- General Member
(5) a representative from the Directorate of Investment and Company
Administration Member
(6) suitable citizen insurance experts Member
(7) an officer from the Myanma Insurance Secretary
(b) may, if necessary, determine the Vice-Chairman and
Joint-Secretary in forming the Supervisory Board.
5. Members of the Supervisory Board who are non- Government servants
are entitled to receive emuneration prescribed by the Ministry.
6. The Myanma Insurance shall: -
(a) bear the expenses of the Supervisory Board;
(b) perform the office work of the Supervisory Board.
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Chapter IV
Duties and Powers of the Supervisory Board
7. The
duties and powers of the Supervisory Board are as follows: -
(a) scrutinizing and givmg decision on applications for business
licence of an insurer, underwriting agent or insurance broker;
(b) determining, with the approval of the Ministry the amount of
paid-up capital to be maintained by an insurer or underwriting agent
according to the type of insurance;
(c) determining the principles upon which evaluation of assets and
liabilities of an insurer or underwriting agent is to be based;
(d) determinmg the principles upon which evatuation of assets and
liabilities of an insurer or derwriting agent is to be based;
determining the limit of investment for any insurance fund;
(e) determining the deposit, licence fees and annual fees to be paid
by an insurer, underwriting agent or insurance broker;
(f) allowing direct insurance to be effected abroad for insurance
businesses which are not accepted by the insurers within the State;
(g) if necessary, establishing a fund for the protection of life
assurance policy-holders and causing action to be taken by other
appropriate means;
(h) employing any local or foreiga expert with the permission of the
Ministry, for assistance ia carrying out its work;
(i) when the insurance business is abolished, apportioning the
deposit made by an msurer to any insurance fund of the person whose
business is abolished, in such manner and in such proportion as it
deems appropriate;
(j) training, disseminating knowledge and communicatmg with
international insurance organizations in order to cause the
technology and business of insurance to thrive and be outstanding.
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Chapter V
Application for Business Licence and Granting Thereof
8. A company
desirous of writing one or more of the following insurance classes
shall apply for business licence to the Supervisory Board in
accordance with the stipulations: -
(a) Life Assurance;
(b) Fire Insurance;
(c) Comprehensive Motor Insurance;
(d) Cash-in-transit Insurance;
(e) Cash-in-safe Insurance;
(f) Fidelity Insurance;
(g) Classes of insurance permitted by the Ministry from time to
time, by notification with the approval of the Government.
9. A company desirous of acting as an underwriting agent or
insurance broker shall apply for business licence to the Supervisory
Board in accordance with the stipulations.
10. The Supervisory Board may: -
(a) after scrutinizing in accordance with the stipulations, the
application submitted under section 8 or section 9, grant or refuse
the business licence;
(b) ask for and examine documents in scrutinizing the application
for business licence.
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Chapter VI
Duties of an Insurer, Underwriting Agent or Insurance Broker
11. An
insurer, underwriting agent or insurance broker shall; -
(a) abide by the provisions of this Law, rules, procedures, orders
and directives made hereunder;
(b) abide by the relevant conditions of the business licence;
(c) not transfer his business licence;
(d) maintain account books and records which indicate clearly his
performance and financial standing to enable systematic and easy
auditing;
(e) audit annual statements yearly, according to the financial year;
(f) if the business licence is cancelled, maintain the assets owned
to the amount equivalent to the liabilities thereof within Myanmar;
(g) not open any branch office of insurance business without the
permission of the Supervisory Board.
12. If an insurer or underwriting agent transacts life assurance
business, he: -
(a) shall cause an actuary to calculate and determine life assurance
premium rates;
(b) shall invest only the amount proposed by the actuary out of the
fund of life assurance;
(c) shall cause an actuary to evaluate the life assurance business
at least once in every 4 years and submit the report thereof to the
Supervisory Board m accordance with the stipulations;
(d) shall re-evatuate with another actuary if directed by the
Supervisory Board when the report submitted under sub-section (c) is
deemed unacceptable or is believed to be detrimental to the
interests of the insured;
(e) if there is a surplus in the evaluation by the actuary may draw
it out unless it is contrary to any existing law or any contract.
However, such draw-out shall not exceed one-fourth of the amount
designated as profit for the insurance policy-holders;
(f) shall pay death claim only to the beneficiary in accordance with
the conditions of the life assurance policy. If the beneficiary is a
minor, it shall be paid to his natural parents or adoptive parents
or lawful guardian;
(g) in case where the beneficiary dies before the assured and the
assured has not re-transferred the title of benefits, shall pay the
death claim in the following order: -
(1) husband or wife;
(2) children;
(3) grandchildren;
(4) brothers and sisters;
(5) parents.
13. An insurer or underwriting agent shall; -
(a) submit programmes of reinsurance to the Supervisory Board;
(b) not revise without the permission of the Supervisory Board,
surrender value of life assurance, paid-up value, loans and interest
rates and commission rates which were approved by the Supervisory
Board;
(c) collect only according to the premium rate which was approved by
the Supervisory Board;
(d) carry out the arrangement of investment only with the approval
of the Supervisory Board; (e) maintain supporting documents of
assets of any insurance fund within the State and submit to the
Supervisory Board on how they have been maintained. The maximum
value of assets shall be as determined according to the type of
insurance by the Supervisory Board;
(f) establish a main fund according to the type of relevant general
insurance business. Such fund shall be unilized only for the
liabilities and expenses relating to the relevant type of insurance
business ;
(g) if, the Supervisory Board directs to establish any other funds
according to the relevant type of general insurance, in addition to
the main fund mentioned m sub-section (f), comply as so directed;
(h) in abolishing the insurance business first replenish the
remaining fund, after payment of all the liabilities and expenses,
into other diminishing insutrance funds;
(i) have the right to draw surplus amount of other insurance funds
with the permission of the Supervisory Board;
(j) apportion his assets to all the policy-holders if adjudicated an
insolvent or if unable to meet his liabilities. The liability to pay
the policy-holders shall have priority over other insutance except
the preferential payments mentioned in section 230 of the Myanmar
Companies Act.
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Chapter VII
Audit
14. An
insurer, underwriting agent or insurance broker shall only allow an
auditor who has obtained the certificate of a practising accountant
issued by the Myanmar Accountancy Council and approved by the
Supervisory Board to audit his financial statements including
accounts and records.
15. If the Supervisory Board, under business requirement directs the
auditor to carry out an extended auditing and investigation, he
shall comply with such directive.
16. During the course of auditing, if any one of the following facts
is discovered, the relevant auditor shall report to the Supervisory
Board immediately: -
(a) violation of or failure to comply with any provisions of this
Law;
(b) discovery of any act or circumstance that may affect the
sufficiency of an insurance fund;
(c) carrying on irregularities including acts detrimental to the
interests of the insured;
(d) being unable to meet the liabilities.
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Chapter VIII
Cancellation of Business Licence
17. If the
Supervisory Board finds that an insurer, underwriting agent or
insurance broker has in&mged any of the following facts, the
Supervisory Board may cancel the business licence: -
(a) commencing business without the paid-up capital determined
according to the type of business (b) not commencing business within
twelve months after obtaining business licence;
(c) discontinuing to operate the relevant type of business;
(d) being adjudicated an insolvent;
(e) operating business m a manner detrimental to the interests of
the policy-holders;
(f) being unable to continue to meet the liabilities;
(g) violation of or failure to comply with the provisions of this
Law by himself or by one of his administrative officers
(h) sending incorrect, inaccurate, ambiguous or fraudulent data to
the Supervisory Board;
(i) failure to disclose or concealment of material facts in applying
for business licence;
(j) failure to effect adequate reinsurance in a case where
reinsurance is required.
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Chapter IX
Liquidation
18. If the
business licence of an insurer underwriting agent or insurance
broker has been cancelled, the person assigned by the Supervisory
Board shall apply to the Court of competent jurisdiction to pass an
order for liquidation of the relevant company m accordance with the
provisions of the Myanmar Companies Act.
19. When the Court receives the application under section 18, it
shall, without sonsidering any objections whatsoever submitted, pass
an order to liquidate the said company and proceed in accordance
with the provisions of the Myanmar Companies Act.
20. In the process of liquidation of the company under section 18
and section 19 or in the process of liquidation under the provisions
of the Myanmar Companies Act, the liability to pay the
policy-holders shall be given priority over other liabilities except
the preferential payments mentioned in section 230 of the Myanmar
Companies Act.
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Chapter X
Taking Administrative Action
21. (a) If
an insurer or underwriting agent: -
(i) fails to maintain the net assets of any insurance fund in
accordance with the stipulations; or
(ii) fails to submit, conceals or misrepresents the facts which the
Supervisory Board asked for in connection with his share in
accordance with this Law; or
(b) if an insurer, underwriting agent or insurance broker: -
(i) fails to maintain the account books and records which indicate
clearly his performance and financial standing systematically and
for easy auditing purpose; or
(ii) fails to audit annual statements compiled for the respective
financial year annually; or
(iii) fails to submit the annual statements and other acoounts
compiled in accordance with the stipulations to the Supervisory
Board within four months after the close of the relevant financial
year; or
(iv) utilizes and distributes the form, policy or advertisement of
insurance business not approved or not permitted for use by the
Supervisory Board or uses after altering the approved form, policy
or advertisement, administrative action shall be taken against bim
22. The Supervisory Board may pass any of the following orders on
the person against whom the admmistrative action is taken:-
(a) causing a fine to be paid;
(b) temporary suspension of the business operated under the business
licence;
(c) permitting the business to be continued after causing a fine to
be paid;
(d) cancellation of the business licence; (e) informing the Ministry
concerned to enter the company on the black list.
23. Any person dissatisfied with the order of the administrative
action passed by the Supervisory Board may appeal to the Ministry
within thirty days from the date of passing the order.
24. The decision of the Ministry shall be final add conclusive.
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Chapter XI
Offences and Penalties
25. Whoever
operates as an insurer or underwriting agent without a business
licence shall, on conviction, be punished with imprisonment for a
term which may extend to 5 years, or with a fine which may extend to
kyats 500,000 or with both.
26. Whoever operates as an insurance broker without a business
licence shall, on conviction, be punished with imprisonment for a
term which may extend to 3 years or with a fine which may extend to
kyats 300,000 or with both.
27. If a responsible person from a company which operates the
business of insurance, underwriting agency or insurance broking
internationally refuses the inspection of the Supervisory Board in
accordance with this Law or does not allow the inspection of the
books, accounts, records and documents, or destroys them in any
manner, he shall, on conviction, be punished with imprisonment for a
term which may extend to one year or with a fine which may extend to
kyats 100,000 or with both.
28. If a responsible person from a company which operates the
business of insurance, underwriting agency or insurance broking
fails to submit the documents, reports, statistics or books asked
for by the Supervisory Board, he shall, on conviction, be punished
with a fine which may extend to kyats 10,000.
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Chapter XII
Miscellaneous
29. The
Ministry 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.
30. Notwithstanding anything contained m any existing law, an
investor or economic enterprise which operates with the permission
of . the Myanmar Investment Commission, shall have the right to
effect the types of insurance transacted by an insurer or
underwriting agent.
31. An insurer or underwriting agent who holds a Foreign Exchange
Acceptor and Holder Licence issued by the Central Bank of Myanmar,
may transact the insurance business in foreign currency.
32. Notwithstanding anything contained in any existing law, a minor
between the ages of 10 to 18 shall enter into a life assurance
contract with the written approval of the parents or lawful
guardian.
33.Notwithstandmg anything contained m any existing law, no tax of
any description whatsoever shall be assessed on insurance indenity
34. With the exception of debt payable to the State, no warrant of
attachment shall be effected on insurance indemnity either
criminally or civilly in respect of other debts.
35. This Law is not applicable to the Myanmar Insurance established
under the Myanmar Insurance Law.
36. Section 27 and section 28 of this Law are determined as offences
cognizable by the Myanmar Police Force.
37. The Ministry may form an organization of service personnel as
may be necessary under this Law, with the approval of the
Government.
38. For the purpose of carrying out the provisions of this Law: -
(a) the Ministry may issue such rules and procedures as may be
necessary with the approval of the Government;
(b) the Ministry or the Supervisory Board may issue such orders and
directives as may be necessary.
(Sd.) Than Shwe Senior General
Chairman
The State Law and Order Restoration Council
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