Oman: FSA Issues Regulation for Health Co-Insurance

Oman Observer, 8 October 2024: The Financial Services Authority has approved a regulation for co-insurance in the health insurance sector under the Oman Law No. 12/1979.

The regulation aims to increase retention ratios of insurance premiums within Oman and reduce the need for reinsurance abroad.

It allows insurance companies without health insurance licences to obtain co-insurance licences, enabling them to act as reinsurers for health insurance products.

This move aims to improve the retention of health insurance premiums within Oman.

The regulation was issued after considering recommendations from an actuarial study on health insurance prices, prepared in collaboration with an international consultancy firm.

The FSA aims to create specialised health insurance companies to provide better services to customers, as many companies currently reinsure health insurance policies with specific reinsurers outside Oman to avoid potential losses.

However, this practice reduces the retention ratios within Oman and deprives the national economy of fund circulation.

The retention ratio in health insurance was 79% in 2023.

Companies with co-insurance licences will not be allowed to sell health insurance policies but can participate with licensed health insurance companies in bearing part of the insurance risks and pay financial consideration, which is the principle of co-insurance.

The FSA has prepared a regulation for licensing health insurance co-insurance, including clauses on work mechanisms, limits of co-insurance risks among insurance companies, obligations related to issuing co-insurance policies, terms and conditions for policy administration, and administrative penalties for violations regarding co-insurance licensing directives in health insurance.

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Oman: MOCIIP Issues Decision on Commercial Loans

Oman Observer, 29 September 2024: The Ministry of Commerce, Industry and Investment Promotion has issued a Ministerial Decision setting the return due for obtaining a commercial loan or debt at 6% unless a lower percentage is agreed upon.

The decision was made based on the Commercial Law and a letter from the Oman Chamber of Commerce and Industry, in response to public interest requirements.

The decision states that this percentage may be exceeded in exceptional cases, such as long-term loans, loans directed to projects contributing to economic development, or loans associated with a high degree of risk, in coordination with the Oman Chamber of Commerce and Industry.

However, this return does not apply to loans provided by banks, finance companies, and asset leasing companies licensed by Oman’s Central Bank.

The decision will be published in the Official Gazette and will be effective for one year from the date of its publication.

It comes within the framework of the government’s efforts to ensure the flexibility of finance for businesses while enhancing governance principles and regulating the investment environment in Oman.

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