9 September 2020

The contemporary Myanmar insurance market is a young market. This is despite the fact that the modern system of insurance arrived nearly 200 years ago and it was a flourished market. The market was disrupted in the 1960s due to the changing political system. Since then Myanmar insurance market was a one-company-market until 2012. The wind of change blew in 1989 and the insurance market was not an exception. In 2012, 12 insurance licenses were issued to the private sector. That was the beginning of the change for the insurance market. The change from a one-company-market to multi-companies market was a big move toward the modernisation of insurance market.

The Insurance Regulator, Insurance Business Regulatory Board (“IBRB[1]), was formed in 2016 and the road map was set up. The development of the insurance sector was done in a systematic manner so and not to rush and install the market in haste. It started with six kinds of insurance and now insurance companies can underwrite almost all types of insurances. Beginning with local companies, it has now expanded to joint-ventures and 100% foreign-owned insurance companies. The Financial Regulatory Department (“FRD”) was formed during the author’s days at the Ministry of Finance to assist the IBRB and IBRB is now able to proceed with ease to develop the insurance market.

2020 – Significant year for the insurance market

This year is a significant year for the Myanmar insurance market. Despite the threat of the COVID– 19 pandemic, IBRB issued six directives, namely Directives No. 1 to 6 to regulate the insurance sector in Myanmar. Directives No.1 to 3 were issued on 4 March 2020 and came into force at the time of its issuance. Whereas Directives No. 4 to 6 will come into force on 1 October 2020.

This article will discuss Directive No. 1­­­ to 3 and the remaining directives will be discussed in the next issue of the ASEAN 10/10 in December.

Directive No. 1

Directive No. 1 is officially referred to as “Directive for Insurance Agents”. It has 42 paragraphs and was issued in exercise of the powers conferred under section 38(b) of the Insurance Business Law. The directive sets out provisions relating to insurance agents, such as license applications, trainings and qualifications, including the required qualifications for both individual and corporate insurance agents.

The directive provides for two kinds of insurance agents, individual or corporate (para 2(a), (b)), who can either be life insurance agents or general insurance agents (para 4(a)-(d)). Life insurance agents can be further classified as tied life insurance agents and non-tied life insurance agents, with tied life insurance agents allowed to work only for one particular life insurance company whereas non-tied life insurance agents can work for up to two life insurance companies. General insurance agents do not have such categorisation and are able to work for up to three general insurance companies.

For corporate insurance agents, they must be an entity registered under the Myanmar Companies Law, licensed as such by IBRB, and made up of licensed insurance agents (para 2(b)). Corporate insurance agent may be either corporate life insurance agent or corporate general insurance agent (para 4(c), (d)), and the same categorisation for individual agents applies. Insurance agents, both individuals and corporate can enjoy the commissions fixed by IBRB (para 30).

All insurance agents shall have a respective insurance agent license issued by IBRB (para 4(a)-(d). The Directive also sets out the qualifications for insurance agents:

  • Individual:
    • Myanmar resident;
    • passed the matriculation exam or work experience in the insurance sector for five years;
    • not a bankrupt or convicted person; and
    • has not been involved in money laundering or terrorist financing (para 8).
  • A corporate insurance agent shall have a minimum paid-up capital of MMK15 million (para 13) and for a financial institution to be a corporate insurance agent it shall have at least three individual insurance agents (para 15(b)).

An applicant for insurance agent license shall attend training course conducted by an insurance agent training institute or an in-house training of a respective insurance company and pass the test conducted by an Insurance Agent testing centre (para 5). The Insurance Testing Centre shall maintain a register of licensed insurance agents and which has to be submitted to the FRD through the Myanmar Insurance Association (para 23, 24).

The Directive also sets out the various offences such as acting as an insurance agent without a proper license, giving false information, embezzling, misrepresentation, breach of trust, fraud etc.  (para 36). The offender shall be punished under the Insurance Business Law (para 41):

Section 22Deals with the administrative action by IBRB, which consists of imposing a fine (and let the business continue), temporary suspension of business and cancellation of the insurance business license.
Section 26Provides for penalty for an offence of operating as an insurance broker without a license –   imprisonment up to three years or fine up to MMK300,000 or both.
Section 27Provides penalty for refusal of inspection of books, accounts, records, documents by IBRB or destroying them – imprisonment of up to one year or fine up to MMK100,000 or both.
Section 28Provides penalty for the offense of failure to submit documents, reports, statistics etc. when required by IBRB – fine up to MMK10,000.


It is also noteworthy that under section 35 of the Insurance Business Law, the aforementioned section 27 and 28 are cognizable offences.

Directive No. 2

Directive No. 2 concerns “Bancassurance” and its objective is to allow financial institutions (banks and microfinance institutions only) to distribute bancassurance to its customers.

The directive identifies two distribution models of bancassurance, (i) referral and (ii) direct sale (para 3(a)(b)). Referral is where a financial institution may refer its customer to the insurer while direct sale is where a member of the financial institution solicit and negotiate with its customers in the purchase of an insurance policy from the insurer.

Financial institutions, wanting to distribute bancassurance, will need prior permission from the Central bank of Myanmar if it is a bank and the Microfinance Business Supervisory Committee if it is a microfinance institution (para 4).

Moreover, financial institutions would also require a corporate insurance agent license issued by IBRB (para 5). As they are regarded as corporate insurance agents they would need to observe the rules for corporate insurance agents such as to have minimum three licensed insurance agents on the Board and work for maximum two life insurance companies if they work as corporate life insurance agents and maximum three general insurance companies if they work as corporate general insurance agents (para 6, 8).

The Directive gives freedom to customers to select the financial institutions distributing cancassurance and financial institutions should also inform their customers of this right (para 12). Financial institutions distributing bancassurance have the duty to ensure confidentiality of insurance information (para 14). The financial institution must have separate filing and records for the bancassurance business and also maintain separate and distinct records of transactions. Such information should be made available to the regulators upon request.

Directive No. 3

The main objective of Directive No. 3 is to protect customers (the insureds or assureds) from unscrupulous insurance products sold by insurance companies. The directive seeks to ensure that insurance agents are conducting businesses in accordance with IBRB’s rules and regulations throughout the term of the insurance policies. The insurance products shall be in line with the objectives and the standards of the IBRB and should be clear, fair, not misleading. The insurance products must be based on actuarial science and Insurance Business Law and relevant regulations (para 2).

The directive formalises IBRB’s application procedure and ensures that all insurers obtain IBRB’s approval through FRD when new products are devised or existing products are amended (para 3(a)). For insurance products pre-existing the Directive, IBRB/FRD can request for additional information (para 3(b)).

Under the Directive, FRD has a duty to submit the proposed new insurance product which it received, to IBRB within 90 days from the date of receipt (para 3(c)). In order to avoid delay on behalf of IBRB/FRD the Directive provides that an insurer may submit one proposed new product at a time (para 5)). FRD also has the duty to keep the information contained in the proposed product confidential if the insurance company requests to do so (para 6).

The introduction of the directives by the IBRB is aimed at modernising and regulating the insurance sector. It is a welcome change that will help to grow and increase healthy competition, product creation, provision of better services and improved risk control and management within the sector.

The remaining Directives No. 4 (on “Reinsurance”), 5 and 6 (relating to insurance matters specifically for the Thilawa Special Economic Zone) will be discussed in Part 2.

If you have any questions or require any additional information, please contact Dr Maung Maung Thein or the ZICO Law partner you usually deal with.

This alert is for general information only and is not a substitute for legal advice.

[1] It was originally it was known as the “Insurance Business Supervisory Board”. The author changed the name to the “Insurance Business Regulatory Board” when he served as a Deputy Minister of Finance and the Chairman of that Board.


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