BUSINESS REPORTER
MUSCAT, DEC 13
The Capital Market Authority (CMA) has issued new guidelines regulating investments of insurance companies and Takaful insurance in the Sultanate. This is in line with efforts by the Authority to support the development of the Omani insurance market and enable insurance firms to diversify their investments.
Shaikh Abdullah bin Salim al Salmi (pictured), Executive President, said the new regulations grant insurance firms greater flexibility in channelling their investments to support their corporate growth objectives, while at the same time maintaining adequate reserves and liquidity to handle claims from policyholders.
In drafting the new guidelines, the CMA took into account investment trends, market volatility issues, international developments in the sector, and other factors. The overall goal, the Executive President said, is to help the insurance companies enhance their investment performance and achieve the greatest economic returns, and thereby support economic growth.
Investments by the insurance sector climbed to RO 709.2 million as of end-September 2020, maintaining an average growth rate of six per cent over the last five years. The sector is a key investor in the governmental bond market alongside banks and pension funds, besides investing in other instruments.
Takaful insurance now accounts for 12 per cent of the total insurance portfolio, he said. With this growth trend in mind, the new regulations seek to ensure that Takaful companies comply with legal provisions like deeds and Islamic investment funds according to the specified percentages and terms whether investing within or outside the Sultanate.
The regulations place limits on investments in schemes such as deposit, commercial and governmental bonds and the public joint stock companies’ shares, investment funds and the companies that are not listed on stock exchange, as well as real estate.
The sector has developed remarkably in recent years and is approaching a total size of about half a billion Omani riyals. Investments by the sector have climbed from RO 503.3 million in 2015 to RO 709.2 million in Q3 2020, representing a jump of 41 per cent over this period.
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