MUSCAT: The Capital Market Authority (CMA) has introduced new regulations governing the marketing of insurance products through banks. These regulations establish a robust framework to manage the relationship between insurance companies and financial institutions, while also safeguarding the interests of policyholders.
The new rules outline clear and effective channels for marketing insurance products, with the aim of enhancing transparency and ensuring that policyholders have a comprehensive understanding of the terms and conditions of their insurance coverage. This initiative is seen as a pivotal and positive step in curbing unscrupulous practices associated with the sale of insurance products through banks, and ultimately reducing potential disputes between policyholders and the banking sector when filing insurance claims.
The CMA's decision empowers relevant authorities to commence implementation of these regulations 90 days from their publication date. This move underscores the Authority's commitment to enhancing the marketing and distribution of insurance products through banks, recognizing the critical role that these channels play in expanding the accessibility of insurance products across various regions in Oman. This wider reach is expected to foster greater awareness of insurance as an integral component of the financial inclusion landscape.
The regulations were formulated after extensive consultation with key stakeholders, including the Central Bank of Oman, the Oman Insurance Association, and the Omani Banks Association. Additionally, international best practices were leveraged to shape the regulations, ensuring alignment with global standards.
The regulations stipulate that insurance companies must obtain the CMA's approval before marketing any insurance products through banks. Furthermore, it is prohibited for multiple insurance companies to market the same insurance product with the same bank for specific insurance activities, such as life insurance, general insurance, or those related to small and medium enterprises. Additionally, insurance companies are required to retain a minimum percentage of net premiums for insurance products marketed through banks, with a higher threshold for certain types of insurance products. (ONA)
Oman Observer is now on the WhatsApp channel. Click here
