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First Insurance Company Emerges in Cambodia

First Insurance Company Emerges in Cambodia

Amidst escalating foreign and local business activity in the country, the State of

Cambodia (SOC) has launched its own insurance company.

Signing the Convention of Technical Assistance to Cambodian National Insurance Company

(CAMINCO) on Jan. 13 were Chheang Vun, SOC's vice-minister of finance, and Alain

E. Rimbert, general director of the Groupement European d'Assur-ance Maritimes et

Terrestres (GEAMT) of France.

"The first step is to strengthen our position on the market," said Chheang

Vun. "With strong support of the world-famous insurance company [GEAMT], clients

will be financially confident of CAMINCO's re-insurer. This is the fulfillment of

the hundred percent re-insurance program."

Operating under the control of the Ministry of Finance, the company received an initial

capital investment of U.S. $2 million from the SOC's Council of Ministers. Year-long

negotiations between CAMINCO and interested foreign companies were deadlocked because

of the latter's demand for a monopoly which the vice-minister described as an "unacceptable

condition" for Cambodia. In early September 1992, the Council of Ministers issued

an ordinance authorizing it to start operation in collaboration with GEAMT.

"This is a unique private company that belongs to the State of Cambodia. We

will help it to obtain international standards," said Rimbert.

As defined within the scope of the convention GEAMT is to give advice, training and

managerial assistance during the start-up period. An interest-free loan package of

U.S. $200,000 which Un Taing Um, CAMINCO's general director, said "does not

have limit of time for repayment" was also promised by GEAMT. According to Im,

repaying capacity will be 85 percent of the monthly income arising from the rent

of half of the building to a foreign company. "All money will be returned within

three years. Meanwhile, GEAMT will receive 40 percent of re-insurance commissions

and 12 percent of the premiums of the local insurance," said Un.

In line with the strategy to provide clients with the highest level of financial

security, the company is going to introduce a wide range of policies-car, motorbike,

cargo, fire and allied perils, construction, ship, aircraft, and special risks insurances.

According to Un, CAMINCO's building costs are approximately U.S. $600,000 Aside from

the registered capital, a U.S. $196,000 government grant is planned for equipment

and refurbishment. The building is currently located on the corner of Streets 106

and 13 in front of the Phnom Penh Municipal Bank. Its grand opening is scheduled

for the end of February this year.

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