T HE state-owned insurance company Caminco submitted a decree to the Council of Ministers asking for controls on private insurance companies, which currently enjoy a free hand.
The decree drawn up by Ung Tang Im, Caminco's director also asks for a government insurance department to be set up which will clear up ambiguity about Caminco and make it purely a state-owned firm.
Currently Caminco's role is unclear, though like all insurance bodies it ultimately falls under the jurisdiction of the Finance Ministry. Im said he expected the decree to be passed in early September.
Im explains: "Now Caminco has an ambiguous role. It is supposed to be only a company, but as this is the only state specialist on insurance, it works also as a kind of unofficial insurance department for the Ministry of Finance.
"Thus the Ministry will have control over a real department which is the framework to issue concrete laws on insurance. As explained in Articles 2 and 3, it will have study and control offices [for the insurance industry].
He added that the control office would ensure that companies seeking to establish themselves in Cambodia would have the proper qualifications, a minimum number of skilled staff, a reasonable amount of funds for payouts and proper investments within Cambodia.
"This will avoid both junk companies and the flight of capital overseas," Im said. The regulations will require companies to spread their investment across a range of fields.
The study office will not only collect statistics on the industry but also get the proper documents and infrastructure for registration.
"With these 'consultants' [in the study office] we intend to foster the development of a modern insurance system.
Philippe Lenain, director of Indochine Insurance Union in Phnom Penh, adds: "The government has mostly adapted for Cambodia the Malaysian and Singaporian insurance systems which have a very strict and complete control over all the agencies. For example, if you insure a building made of brick or of wood, your commission rates are controlled and different.
"For a developing country, such a control is often the only way to avoid any deviation [in terms of money laundering]. Indeed an insurance company, as it deals only with papers, is a very convenient structure to clean suspiscious money."
Even under the new decree the status of Caminco, which began operations in 1989, remains partly unclear. Im said it was up to the Ministry of Finance whether the reconstituted Caminco would have special rights as compared to private companies.