Insurance Update: Request for Proposal and Invitation Letters for Expression of Interest issued by Financial Regulatory DepartmentJanuary 29, 2019
RfP for licenses to carry on life insurance business in Myanmar as 100% foreign company
As reported earlier by VDB Loi, (read here: http://www.vdb-loi.com/mlw/myanmar-opens-up-insurance-sector-to-foreign-investors/) when a foreign life insurer wishes to obtain an individual license in Myanmar, it is required to submit a proposal in response to a Request for Proposal (the “RfP”), issued on 18 January 2019 by the Financial Regulatory Department (the “FRD”) under the Ministry of Planning and Finance (the “MoPF”).
In line with the Announcement dated 2 January 2019 (the “Announcement”), up to 3 Myanmar subsidiaries of foreign life insurers will be granted licenses.
The proposal must be submitted by foreign insurers by 1 March 2019.
Successful applicants would need to set up a 100% subsidiary in Myanmar.
Unsuccessful applicants to the RfP can subsequently prepare and submit (by 26 April 2019) an Expression of Interest to operate as a Joint Venture (“JV”) with an eligible local insurer.
Applicants must pay a US$60,000 application fee and further Proposal Bond of US$400,000 if selected as a Preferred Applicant.
The process will involve submission of proposals, clarifications, presentations and interviews (in the week of 18 March 2019), selection of the preferred applicants (formal announcement on 29 March 2019), documentation finalization and finally, issue of license.
Format of application has been provided in Schedule 7 of the RfP, and the RfP includes details of what is expected in application form (basic information, documents to be submitted) and business plan (such as information on global operations, proposed Myanmar operations).
Invitation Letters for EoI to form JV to carry on life / non-life insurance business in Myanmar
Two invitation letters were published by FRD on 18 January 2019 for foreign insurers to submit expression of interest to form JVs with local partners to operate in life and non-life insurance business in Myanmar.
At the moment there are 3 local life insurers and 8 general insurers.
The proposal must be submitted by 11 February 2019 in the EoI Form provided at Annex B of the Invitation. Announcement of shortlisted applicants shall be on 17 May 2019.
Importantly, the MoPF only permits 1 local life / non-life insurer to partner exclusively with 1 foreign life/composite insurer JV partner (as the case may be), and vice versa. Both the Applicant and foreign JV partner (if identified) are permitted to respond to only one Invitation and to participate in only one EoI at any point in time.
The maximum percentage shareholding for foreign insurers in each joint venture has now been set to the maximum of 35%.