Licence cancellations procedural: CMA

MUSCAT, Sept 25 – Responding to reports circulating on social media with regard to its recent decision to cancel the licences of two insurance companies, the Capital Market Authority (CMA) has clarified that the cancellations pertain to firms that are no longer in operation because they have merged or amalgamated with other entities.
For example, Arabia Insurance Company and Falcon Insurance Company recently merged together to form Arabia Falcon Insurance Company, the CMA said in a statement. Likewise, Muscat Insurance Company and Muscat Life Insurance Company merged together while retaining the identity of the former, Muscat Insurance Company.
This mergers and integrative exercises took place in the lead up to the season of Initial Public Offerings (IPOs) whereby all insurance firms are obligated to divest 25 per cent of their equity on the Muscat Securities Market (MSM) via public offerings.
“The Authority clarifies that the cancellations of the three licences were purely procedural, and were aimed at granting new licences to the new entities that were created in the wake of the mergers and amalgamations,” it said, noting that the mergers do not have any bearing on the rights of the policyholders nor on the premiums agreed on these policies.
From a total of 23 insurance firms that were in operation before the latest series of mergers and adjustments, the insurance market today is made up of 10 national companies, 10 branches of foreign companies and one reinsurance firm.