(MENAFN- Muscat Daily) Muscat- Market regulator, Capital Market Authority (CMA), announced that it will cancel licenses of some insurance companies, after their mergers as a part of its plan to issue fresh licenses for merged entities.
'CMA would like to explain that the cancellations of the merged companies was a formality to grant the entities new licenses and that the rights of policyholders and stakeholders with such companies will not be affected and the merger processes would not have any impact on insurance premiums', the regulator said in a statement.
The statement added, 'CMA clarifies that the step was taken to protect the rights of policyholders and stakeholders'.
Recently, Arabian Insurance company and Falcon Insurance announced the merger under the name 'Arabian Falcon'. Similarly Muscat Insurance and Muscat Life Insurance also announced their mergers and are currently doing the preparations for launching their initial public offering (IPO) to get their company listed on the stock exchange, the regulator said in a press release.
'CMA sees such mergers as a step forward, which would contribute to creation of larger financial entities able to encounter market volatility and to cover larger risks', it added.
Recent move by insurance companies to sign mergers deals and subsequent listing on stock market was necessitated by latest amendments to Insurance Companies Law under Royal Decree No 37/2014 which requires increasing the capital from RO5mn to RO10mn. It also requires the national insurance companies to convert into public joint stock companies through offering part of their capital in public offering.
The amendments granted the companies a three year grace period to adjust their status according to the new requirements.
According to the recent amendments and decisions, the number of licensed insurance companies will be ten national companies and ten branches of foreign companies in addition to one reinsurer. The number was previously 23.
CMA, as regulator and supervisor of the insurance sector said it would like to emphasise that it works to furnish attractive environment through encouraging merger processes to create big blocks with strong financial positions which would enhance the abilities of such companies to underwrite new risks, to increase retention ratios in the local market to encounter future risk and to contribute to the development and upgrading of the performance and the GDP of the sultanate.
MENAFN2509201701410000ID1095897539
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.