The Executive President of the Capital Market Authority (CMA) issued a decision no. (E/84/2023) on issuing the Bancassurance Regulation which represents a regulatory framework focusing on governing the relationship between insurance companies and banks and provides adequate protection for policyholders of bancassurance products.  The Regulation specifies effective channels and procedures for marketing such products to clarify clauses and increase awareness of policyholders.  The issuance of this Regulation is considered positive and important step to limit unsound practices when marketing bancassurance products.  Additionally, the provisions of this Regulation will limit any disputes between policyholders and companies in cases of insurance claims.  The CMA’s decision directs the competent entities to implement the provisions of this Regulation after 90 days from the date of publication of the Decision in the Official Gazette.  

 

The CMA is keen to increase the quality of the marketing and selling of bancassurance products since they are considered as an important marketing channel to support spreading and accessibility of insurance products across different geographical areas in the Sultanate of Oman. Such spread of products will play a key role in increasing insurance awareness as a main part of the financial inclusion   This Regulation was drafted in consultation with the relevant parties such as the Central Bank of Oman, the Omani Insurance Association and the Oman Banks Association in addition to benefiting from international practices to develop the bancassurance business in the Sultanate of Oman.

 

The Regulation emphasizes that insurance companies shall obtain CMA’s approval prior to marketing bancassurance products.  It also stipulates that more than one company shall not sell the same insurance product with the same bank for life insurance activity or general insurance activity or related to SMEs.  The Regulation also obliged insurance companies to retain at least 40% of the net premiums of bancassurance products except for life insurance, property insurance and products related to SMEs where net retention may be 25%.

 

The Regulation confer the CMA the right to audit the business and set out quality standards for selling the products via call centers.