Wait for insurance association further delayed
Wait for insurance association further delayed
Approval by the Ministry of Finance for a proposed insurance association will be further delayed because a draft decree on the regulations that would govern the body is still being worked on.
“We are waiting to receive a draft decree on the insurance association which is currently being finalised by the Lao National Chamber of Commerce and Industry,” an official from the Insurance Supervision Unit of the ministry's State Owned Enterprise Finance Management Department said on Friday.
The ministry had hoped to officially set up the insurance association next month, after preparations have been in progress for many years.
“Now the timetable has changed and it may be delayed to July or August or even later,” the official said. “But the association will have to come into being this year because all the insurance companies have agreed to the idea.”
Once the association is set up, it will benefit both operators and customers because operators will have to comply with the fee and price schedule for insurance products as set by the Ministry of Finance.
The regulations governing the association will also serve to ensure fair competition. Another benefit is that insurance companies will be able to participate in both regional and international insurance opportunities.
In Asean countries, insurance companies that have the same or similar services and products will be able to integrate as one group.
Deputy Managing Director of Allianz General Laos (AGL), Mr Holady Volarath, said recently that once the association is set up it will be easy for the government to handle its management and administration.
The associa tion would also be able to gain membership in the Asean Insurance Council (AIC), which would give it a voice and active participation. At present, Lao insurance companies are only observers at meetings convened by the AIC.
The AIC finances training courses for its members, as well as meetings to discuss business cooperation, new product presentations, and the exchange of information.
Currently all Asean members have an insurance association, except Laos and Myanmar. The AIC is an organisation under Asean which focuses primarily on the insurance industry and its related fields, according to its website.
The organisation's objectives are to promote and stimulate the development of the insurance industry within Asean and to build relationships among insurance companies in Asean.
The inauguration of the AIC's permanent secretariat is part of the organisation's strategic initiative to enhance its role and contribution to the development of the insurance industry before the implementation of the Asean Economic Community at the end of this year.
From 1990-2007, AGL was the only insurance provider in Laos but there are now several more and therefore more competition for market share. Since 2007, another 15 companies from Laos, Thailand, Malaysia, Vietnam, China, France and Japan have invested in the sector.
The increase in the number of insurance companies means the sector is able to grow and create more investment opportunities.
Insurance companies provide a range of products, including motor, home and health insurance, to individuals and businesses.
They also provide small to large risk cover for local and foreign investors, various organisations and development projects.
