Ministry of Planning and Finance (MoPF) director-general of the Foreign Regulatory Department U Zaw Naing disputed any such last minute policy changes in regards to the shareholding structure of the joint ventures that reportedly caused a number of local insurers to get cold feet and pull out of negotiations with their foreign counterparts.
It was reported by the Nikkei Asian Review on August 2 that three foreign insurers – Thailand’s Muang Thai Insurance and Muang Thai Life Assurance and South Korea’s DB Insurance – have pulled out of their JV arrangements as they could not finalise agreements with their local counterparts.
This was reportedly due to a last minute change by the government allowing the foreign insurers to buy only newly issued shares of local insurers instead of existing shares to form JVs.
U Zaw Naing told The Myanmar Times that Section 3.1.6 of the request for proposal (RFP) rules liberalising the insurance market required “the method of acquisition to be in the form of the foreign joint venture partner subscribing for new shares in the applicant (that is, issuance of new shares instead of a sale and purchase of existing shares in the applicant)”.
“We did not change anything, it was in the original announcement under Section 3.1.6 and it included the part about the new shares,” U Zaw Naing said, adding that the ministry sent out nine RFPs on May 17 from the nine expressions of interests it received from local life and non-life insurers interested in setting up partnerships with foreign insurers.
According to U Zaw Naing, the ministry had received six out of the nine RFPs by the June 21 deadline. “Only six RFPs were returned on the deadline, not the full nine which applied,” U Zaw Naing said.
He reiterated that those who have been approved to operate in the life and non-life segments of the insurance market are free to start operating their JVs in the country.
“The liberalisation of the insurance market will allow more competitive products to enter the market, enabling those seeking insurance to choose the right product depending on the insurance premium they want to pay for the coverage they need,” he said.
A number of local insurers approached by The Myanmar Times did not want to comment on the issue of the shareholding structure.
On August 2, the government approved AYA Myanmar General Insurance Company and Sompo Japan Nipponkoa Insurance, Grand Guardian General Insurance Company and Tokio Marine, Nichido Fire Insurance and IKBZ Insurance Company and Mitsui Sumitomo Insurance Company for non-life insurance.
In the life insurance segment, the government approved partnerships between Capital Life Insurance and Taiyo Life Insurance Company, Citizen Business Insurance and Thai Life Insurance, and Grand Guardian Life Insurance Company and Nippon Life Insurance.
In April, the government approved Prudential, Dai-ichi Life, AIA, Chubb and Manulife to operate wholly-owned units for life insurance in the country.