With more options and transparency, a new unified motor insurance policy is in the final stage of implementation in Oman. While revealing this to Observer, a senior official of the Capital Market Authority (CMA) said that discussion on the amended version of the policy is currently under way with the Ministry of Legal Affairs. The board of directors of CMA which regulates the insurance market in the Sultanate has already given its approval for the amendments.
“Besides including international practices, opinions of insurance companies, brokers and agents were sought to be incorporated while finalising the policy”, said Qais Saeed Saleem al Suhai, Senior Specialist, Valuations and Risk Surveillance Department at CMA.
With new options and annexures for accidents and protecting the rights of the policyholders, the unified policy is standard form of the minimum requirements of the motor insurance contract, he said.
Ahmed Salim al Harrasi, Acting Director of Onsite Inspection and Compliance said that there are new clauses and options in the policy explaining the rights and obligations of policyholder to avoid any differences and confusion.
“The unified policy is standard form of the minimum requirements of the motor insurance contract”, he said, adding, “the new policy will have more clarity between insurance companies and brokers”.
He said that further to CMA notification in November 2014 based on Royal Decree No 39/2014, the regulator issued reminder recently asking the Omani insurers to comply with new regulations requiring them to be listed on the Muscat Securities Market and maintain capital of RO 10 million.
While warning the companies to stick to the 2017 August deadline for compliance, the letter asks them to provide the regulator with their “plan and date regarding transferring the company to public joint stock company”.
About two-thirds of insurance companies in the Oman market will be affected by the new amendments and will need to comply with the amendments within a period of three years.
Currently, only four insurers are listed on the local bourse, namely, Al Madina Insurance Company SAOG, Dhofar Insurance Company SAOG, Oman United Insurance Company SAOG and Takaful Oman Insurance SAOG.
In a recent report, Moody’s said increased capital-related regulation may reduce competitive pressures by encouraging growth in new market segments and/or by encouraging consolidation among some of the smaller players whilst posing a barrier to new entrants.
“We expect the market as a whole to benefit from the requirement to be stock market listed, as it will require periodic financial disclosures, enhancing transparency (a general deficiency in the market now) and improving companies’ access to capital markets,” the report said.
According to Business Monitor International, the non-life sector in the Sultanate is considerably larger, with premiums of around $885 million in 2015.
“Growth will, however, be slower than the life sector, with premiums increasing by less than 1 per cent annually, on average, to reach $935 million in 2019.
Insurers in the country saw a jump in claims in late 2015 due to the impact of heavy rainfall in September —around RO3.6 million has been paid in compensation for damage to property, machinery and cars.