Muscat: As per the regulation, insurance companies are not permitted to market any insurance products through the bank, except after obtaining approval from the Authority. The regulation directs that it is not permissible for more than one company to market the same insurance product with the same bank for the activity of life insurance, or general insurance, or insurance related to small and medium enterprises.
The regulation represents a framework that focuses on the governance of the relationship between insurance companies and banks and provides adequate protection for holders of insurance policies that are marketed and sold through banks. It specifies effective channels and mechanisms for marketing these products in a way that ensures clarity of terms and achieves sufficient awareness for the insurance policy holder.
The issuance of the regulations is considered a positive and important step in reducing unsound practices in marketing this type of products through banks.
The provisions of this regulation will also contribute to reducing any disputes between the holder of the insurance policy related to the banking sector and companies when there are insurance claims.
The decision of the CMA will direct the concerned authorities to implement the provisions of the regulation after 90 days from the date of its publication.
The process of drafting the regulation relied on consultation with relevant parties represented by the Central Bank of Oman, the Oman Insurance Association and the Omani Banks Association, in addition to international experiences in developing bancassurance business in the Sultanate of Oman and ensuring its commitment to achieving the best levels of international practice to regulate the Omani insurance market.
The regulations obligate insurance companies to retain a percentage of not less than 40 percent of the net premiums for insurance products marketed through banks, excluding the product of life insurance activity, property insurance, and insurance products related to the small or medium enterprise.
The regulations give the Authority the right to supervise and control the processes of selling and marketing products with a set of provisions, the most important of which are internal auditing of marketing insurance products through the bank, notifying the Authority of any violations, and setting controls to ensure that people tasked with marketing insurance products through banks adhere to the provisions of the Law on combating and terrorism financing.
