The Ministry of Economy and Finance has approved in-principle revisions to a draft sub-decree on insurance, as the industry continues its current growth trajectory and attracts new investors each year.
The content of the draft sub-decree was also given the in-principle nod by the Council of the Non-Banking Financial Services Authority (NBFSA) on November 5, according to a press release on the minutes of an NBFSA meeting.
The virtual meeting was presided over by Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth who is also chairman of the NBFSA council.
The draft sub-decree was designed based on the insurance law adopted in 2014, an existing sub-decree on insurance implemented in 2001, and research into laws and regulations that govern the industry in the region.
Youk Chamroeunrith, Group CEO of Forte Insurance, the largest insurance company in Cambodia, lauded the revisions to the draft sub-decree, despite the stricter regulations it would impose, which he said would ensure sustainable and inclusive growth in the sector.
He told The Post on November 7: “We noted that the insurance sector in Cambodia is growing … which requires a stricter minimum standard to ensure that the sector continues its sustainable and inclusive growth.”
According to the press release, the draft sub-decree consists of six chapters and 115 articles, designed to set rules, procedures and standards for the management and control of insurance business to ensure good governance, efficiency, fair and honest competition, and the protection of policyholders’ interests, as well as to build public confidence in the insurance sector.
However, the NBFSA council also recommended that some key points be amended and that the draft sub-decree be submitted to the National Council of Khmer Language for review before requesting the government go over the document.
The insurance sector in Cambodia earned about $85 million in gross written premiums in the first quarter of this year, increasing by 16.3 per cent year-on-year, according to the Insurance Association of Cambodia (IAC).
Of that, general and life insurance premiums came to $39.1 and $44.6 million, respectively, surging by 19.5 per cent and 15.5 per cent year-on-year and accounting for 46 per cent and nearly 53 per cent of the total.
Micro-insurance premiums were to the tune of $1.2 million, down by 26.7 per cent year-on-year, and accounted for just 1.4 per cent of the total, the IAC said.
The insurance sector paid out around $11.3 million in claims over January-March, with general, life and micro-insurance accounting for $9.1, $2.1 and $0.2 million.
As of March 31, there were nearly 1.2 million active policies, categorised as “general” (510,000), “life” (380,000) and “micro-insurance” (280,000).
IAC said it currently comprises 33 insurance companies – 16 general insurers, 11 life insurers, five micro-insurers and one reinsurer.