Insurance Products Marketing Rules aim to Encouraging New Insurance Products and Enhancing Policyholders’ Protection

 

Al Maamare: The Rules Provide for Competitive Environment

 

 

Acting Vice President for Insurance Sector at the Capital Market Authority Ahmed Ali Al Maamar said the Insurance Products Marketing Rules recently approved by CMA  were issued to emphasize CMA’s keenness to set out professional standards to enhance the quality of insurance products in light of the industry’s development and recurrence of the types of insurance products marketed by the companies in line with the requirements and needs of the market adding that such diversification in launching insurance products in the market aims to meeting the increased demand  for insurance coverage.

 

He added that CMA had had prepared  guiding rules for the provision of new insurance products vide Circular 16/2008 issued on 9 June 2008 and in view of the review of the rules regulating marketing of insurance products new rules were set out to regulate the process in line with the developments and changes taking into account the technical and legal requirements for marketing each type of insurance products (life/general/health). The new rules include all the procedures and processes leading to quality products in the  Omani  market.

 

Al Maamari pointed out that the rules aim in their essence  to easing the approval process of products as  a list of requirement was set up to consider the application by CMA was well as enhancing the role of the actuary in reviewing the products. He added avoiding CMA’s approval aims at marketing the products outside the  local market. The rules also aim to identify the products  and set up a prior mechanism for marketing and achieving these object provides adequate protection for policyholders through choosing sound products as regards professional and legal  aspects and at the same time regulate this matter and identify the  documents required  for marketing in the market.

 

He added that the rules were issued according to the methodology of CMA in consulting the insurance companies and organized a workshop to explain the rules and attained the opinion of the experts and professional as well as actuaries from outside the Omani market to avail their  experience for better vision on marketing the insurance products.

 

Pursuant to the rules  companies may only market any insurance product after obtaining CMA’s written consent as well as written application to CMA on the form prepared for this purpose, payment of the application consideration fee, meeting the requirements and terms and conditions including identification of the specifications of the insurance product, provide the policy of the product and all documents in Arabic or accompanied by Arabic translation and indicating that in the event of discrepancy the Arabic version will prevail, providing pricing policy matching the underwriting policy approved by the board of directors of the company, marketing material documents, actuary certificate and the Sharia supervisory board certificate.

 

The product shall be compatible with the requirements of the  code of professional conduct of the  companies operating in general insurance, general Takaful, life insurance or family Takaful. Design of the products shall be based on sound insurance principles and the risks covered under the policy shall be clear and transparent free of any ambiguity and shall be fair between the insurer and insured.

 

CMA  will consider the application to ensure meeting all the requirements and may ask for further documents and requirements. The application shall be  deemed  rejected if applicant fail to provide the required documents within 30 days from the date of the request.

 

CMA shall issue its approval for marketing the insurance product in not more than 30  days after submission of completed application. If  such term lapsing without deciding in the application shall be deemed rejection. CMA may also cancel its approval to market  to insurance product by decision for cause and shall inform the company of the cancellation decision before adequate time and may change the policy of the insurance product.  Application fee is RO 100 and marketing approval fee is RO 500.

 

225 insurance products were approved in 2016 which is indication of increased demand for insurance products as well as enhanced awareness of the importance of insurance coverage. The Omani insurance market had grown by 8% in the past five years approaching RO half billion in volume.