Lao insurance association needed prior to AEC
Lao insurance association needed prior to AEC
Local insurance operators have said that gover nment approval for the proposed Lao Insurance Association must be given before the inauguration of the Asean Economic Community (AEC) at the end of this year.
“This association will benefit our insurance service operations. Otherwise we will lose the opportunity,” Lao insurance operator representative Mr Holady Volarath said last week.
“We will have an Asean insurance meeting in Cambodia in October and by then we will have to report to the meeting on the progress made with preparations for the association,” said Mr Holady, who is Allianz General Laos (AGL) Deputy Managing Director.
Currently the operators are busy with preparations for the project and preparations are also underway to formulate a new Lao insurance association regulation or law.
“We have prepared the draft but it has yet to be approved,” Mr Holady said.
The operators have worked on the establishment of the association for a number of years. They have talked over the issue many times and have prepared a lot of the paperwork.
“We will have another meeting with the Ministry of Finance about the project soon,” he said.
Approval by the ministry for the proposed insurance association has been delayed many times because the draft decree on the regulations that would govern the body was still being worked on.
The ministry hopes to officially set up the insurance association soon as preparations have been in process for many years.
The association will have to come into being this year because all the insurance companies have agreed to the idea, an official from the Insurance Supervision Unit of the ministry's State Owned Enterprise Finance Management Department said recently.
Once the association is set up, the 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.
The association would also be able to gain membership in the Asean Insurance Council (AIC), which would give it a voice and active participation.
The AIC finances training courses for its members as well as holding meetings to discuss business cooperation, new product presentations, and the exchange of information.
At present, Lao insurance companies are only observers at meetings convened by the AIC. “That means we can say nothing,” Mr Holady said.
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 AEC.
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.
