The State Law and Order Restoration
Council The Myanmar Insurance Law
(The State Law and Order Restoration Council Law
No. 10/93)
The 5th Waxing Day of Second Waso, 1355 M.E.
( 23rd July, 1993 )
The State Law and Order Restoration Council hereby
enacts the following Law :-
Chapter I
Title and Definition
1. This Law shall
be called the Myanmar insurance Law.
2. The following
expressions contained in this Law shall have the
meanings hereunder:
(a) Myanmar Insurance means the Myanmar Insurance established
under this Law;
(b) Insurance Business means the insurance business mentioned
in section 11;
(c) Life Assurance means the undertaking of liability
to pay a valid claim under a Life Assurance policy;
(d) General Insurance means the undertaking of liability
to pay admissible claims under policies relating to all
classes of insurance other than Life Assurance;
(e) Re-insurance means the cession by a primary insurer
of the whole or part of liabilities undertaken by it to
another insurer;
(f) Ministry means the Ministry of Finance and Revenue;
(g) Board of Directors means the Board of Directors of
the Myanmar Insurance.
Chapter II
Establishment and Aim
3. The Myanmar Insurance is established
under this Law as a legal entity having perpetual
succession, capable of suing and being sued in its
own name.
4. The Myanmar
Insurance is established with the following aims
:-
(a) to overcome financial difficulties by effecting mutual
agreement of insurance against social and economic losses
which the people may encounter, due to common perils;
(b) to promote the habit of savings individually by effecting
life assurance, thus contributing to the accumulation
of resource, of the State;
(c) to win the trust and confidence of the people in
the insurance system by providing effective insurance
safeguards which may become necessary in view of the social
and economic developments.
Chapter III
Formation of the Board of Directors and Management
5. The Government
-
(a) shall form the Board of Directors with the Departmental
Heads of the government and suitable citizens;
(b) shall, in forming the Board of Directors determine
the Chairman and Secretary at the same time;
(c) may determine the tenure of the Board of Directors;
(d) may, during the tenure of the Board of Directors
terminate the membership of any members or replenish any
person as a member.
6. The Board of
Directors shall undertake responsibility for the
insurance business and exercise powers of the Myanmar
Insurance contained in this Law.
7. Members of
the Board of Directors who are non-Government servants
are entitled to receive remuneration prescribed
by the Ministry.
8. In order to
carry out the functions and duties of Myanmar Insurance,
the Board of Directors may form committees comprising
members of the Board of Directors, experts and service
personnel. In forming such committees the duties
and powers thereof shall be determined.
9. In respect
of matters relating to meetings of the Board of
Directors, convening of meetings and passing of
resolutions may be carried out in the manner prescribed.
10. The Chairman
of the Board of Directors -
(a) shall have the power to enter into contracts and
sign documents, exchange of notes and insurance policies
on behalf of Myanmar Insurance;
(b) may, from among his powers delegate the power to
sign insurance policies to the officers of Myanmar Insurance.
Chapter IV
Insurance Business
11. The Myanmar Insurance shall
undertake the following insurance business;
(a) Life Assurance;
(b) Third Party Liability Insurance;
(c) General Liability Insurance;
(d) Fire Insurance;
(e) Marine Cargo Insurance;
(f) Marine Hull Insurance;
(g) Aviation Insurance;
(h) Engineering insurance;
(i) Comprehensive Motor Insurance;
(j) Oil and Gas Insurance;
(k) Cash-in-transit Insurance;
(l) Cash-in-safe Insurance;
(m) Fidelity Insurance;
(n) Travelling Insurance;
(o) Bodily Injury Insurance;
(p) Other classes of Insurance;
(q) Insurance determined by the Ministry.
Chapter V
Powers of Myanmar Insurance
12. The powers
of Myanmar Insurance are as follows -
(a) effecting other suitable investments in and outside
the State, with the approval of the Ministry;
(b) opening branches and appointing agents in and outside
the State with the approval of the Ministry;
(c) re-insuring in and outside the State, the whole or
part of its liabilities under the insurance business undertaken
by it;
(d) investing in securities, debentures, shares and savings
certificates;
(e) co-ordinating with others insurance companies in
respect of the premium rates and policy terms and conditions;
(f) accepting foreign exchange received as premium from
insurance effected;
(g) paying compensation in foreign exchange for losses,
as insurance is effected in foreign exchange;
(h) determining the premium rate, indemnity rate, compensation
rate, extra premium rate for reason of perils, no claim
bonus, ex-gratia payment, penalty, commission rate, life
assurance loan and interest rate, life assurance surrender
value and paid-up rate;
(i) actuarial valuation of the life assurance business
from time to time; hiring actuary required for such valuation
with the permission of the Ministry;
(j) in an actuarial valuation of the life assurance business,
if it is found that profits have accrued, allocating such
profits to the assured entitled thereto;
(k) permitting other companies which have been granted
the right to transact insurance business under section
4 of the State-owned Economic Enterprises Law to transact
any other class of insurance business or more than one
class of insurance business, with the exception of Third
Party Liability Insurance and Re-insurance included in
the insurance business which are to be transacted solely
by it;
(l) utilizing foreign exchange in accordance with the
existing laws, regulations and bye-laws for re-insurance
premium, compensation to be paid, deposit, litigation
costs, cost of stamps, lawyer's fees, survey fees and
other expenses directly concerned with the business, which
are required to be settled in foreign exchange:
(m) laying down measures required for the perpetual and
up-to-date progress of insurance education.
Chapter VI
Effecting Insurance and Granting of Benefits
13. Government servants shall effect
compulsory life assurance with the Myanmar Insurance
in accordance with the prescribed age and scale
of pay.
14. A person who
has attained majority may effect life assurance
for a minor.
15. Owners of
motor vehicles shall effect compulsory Third Party
Liability Insurance with the Myanmar Insurance.
16. An entrepreneur
or an organization operating an enterprise which
may cause loss to State-owned property or which
may cause damage to the life and property of the
public or which may cause pollution to the environment
shall effect compulsory General Liability Insurance
with the Myanmar Insurance.
17. The Ministry
may under section 16 determine form time to time
the entrepreneurs or organizations which are to
effect compulsory General Liability Insurance.
18. State Organizations
and enterprises which have fifty percent and above
of the capital investment subscribed by the State,
shall effect insurance only with the Myanmar Insurance,
if the class of Insurance they desire to effect
is of the class which is accepted by the Myanmar
Insurance.
19. Economic Organizations
which have been formed under a permit under the
Union of Myanmar Foreign Investment Law shall effect
only with the Myanmar Insurance the classes of insurance
which the Myanmar Insurance determines from time
to time. However from amongst the classes of insurance
which the said Economic Organizations are to effect
the Ministry of Finance and Revenue may exempt from
effecting insurance of any class or more than one
class, in the interest of the State.
20. Notwithstanding
anything contained in any existing law, only the
assignee of the assured shall be entitled to the
benefits, in respect of every life assurance policy
effected under this law.
Chapter VII
Capital and Profit Allocation
21. (a) The State
shall be the sole shareholder of the Myanmar Insurance.
The authorized capital of the Myanmar Insurance
is Kyats 300 millions, of which kyats 150 millions
shall be fully paid up by the State. The balance
of the, authorized capital may be subscribed by
the State as and when necessary.
(b) The authorized capital and paid up
capital of the Myanmar Insurance may be increased with the
permission of the Government.
22. The Myanmar
Insurance shall maintain the following funds; -
(a) General Reserve Fund;
(b) Life Assurance Fund;
(c) General Insurance Fund.
23. The following sums shall be paid to
the General Reserve Fund -
(a) initial subscription by the State of kyats 50 millions;
(b) a sum equivalent to ten per cent of the profits allocated
after actuarial valuation of the Life Assurance business;
(c) a sum equivalent to ten per cent of the balance after
subscribing to the Insurance Fund from the annual operating
surplus of each class of General Liability Insurance.
24. The percentage
of subscription to the General Reserve Fund may
be increased with the permission of the Government.
The total amount of the General Reserve Fund may
exceed the paid up capital of Myanmar Insurance.
25. The following
sums shall be paid to the life Assurance Fund :-
(a) initial subscription by the State of kyats 600 millions;
(b) the surplus after deducting the expenditure from
the annual income of the Life Assurance business.
26. A sum equivalent
to forty percent of the annual premium income of
each class of General Insurance from out of the
surplus of the General Insurance business or if
such operating surplus falls short of forty per
cent of the annual premium income the whole surplus
shall be paid into the General Insurance Fund.
27. The Myanmar
Insurance shall, after paying ten per cent from
the profits accrued after actuarial valuation of
the Life Assurance business to the General Reserve
Fund allocate the remaining ninety per cent to the
Life Assurance policy-holders.
28. The Myanmar
Insurance shall, after subscribing to the Insurance
Fund subscribe ten per cent to the General Reserve
Fund from the surplus of each General Insurance
business and pay the remaining ninety percent to
the Government.
29. In the event
a deficit occurs in the operation of the insurance
business in respect of a class of insurance business
the Myanmar Insurance shall, in the first instance
utilize the Insurance Fund of that class. If the
Fund is insufficient, it shall draw upon the Reserve
Fund and if the Reserve Fund is still insufficient,
the State shall be responsible for settlement of
the outstanding claims.
30. The Myanmar
Insurance shall open an account and deposit the
working capital required for its business with the
Central Bank of Myanmar or with any State-owned
financial institution.
31. The Myanmar
Insurance -
(a) Shall open a foreign exchange account with the relevant
bank in order that acceptance of insurance and settlement
of claims may be made in foreign exchange;
(b) after deposit in the foreign exchange account foreign
exchange equivalent to kyats 5 millions as an initial
deposit, may deposit the foreign exchange received for
the business and disburse payments payable for the business.
(c) when the balance of the account is insufficient to
meet commitments in foreign exchange, it may be replenished
with the permission of the Government.
Chapter VIII
Accounts and Audit
32. The financial
year of the Myanmar Insurance shall be the same
as the financial year of the State.
33. The Myanmar
Insurance shall submit to the auditing by the Auditor
Generals Office in respect of its accounts.
34. (a) At the
close of every financial year, the Myanmar Insurance
shall prepare the annual accounts and balance sheet
in the manner prescribed by the Ministry;
(b) The annual accounts and balance sheet duly certified
by the Auditor General’s Office shall be submitted
together with the annual report of the Myanmar Insurance
to the Government through the Ministry within 6 months
after the close of each financial year;
(c) The Myanmar Insurance shall publish the annual report
in the manner prescribed by the Ministry, for the information
of the public.
Chapter IX
Miscellaneous
35. The Myanmar
Insurance has the right to dispose of buildings,
property and vehicles taken over by it on payment
of compensation for loss and damage, in accordance
with the stipulation of the Ministry.
36. Except for
debts owed by the policy holder to the State or
to Myanmar Insurance, other debts and liabilities,
payable or dischargeable to the policy holder in
these respects under this Law shall not be attached
under any decree or order of any criminal or civil
Court.
37. Movable and
immovable property belonging to the Myanmar Insurance
Corporation established under the Insurance Business
Law, operations in the process of operation, operations
which have been completed, assets and liabilities
and also the office staff shall devolve on the Myanmar
Insurance.
38. Contracts,
exchange of notes and insurance policies entered
into or executed under the Insurance Business Law
in respect of the insurance business shall be deemed
to be entered into or executed by the Myanmar Insurance.
39. The Management
Committee of the Myanmar Insurance Corporation established
under the Insurance Business Law shall have the
right to carry on the business until the day the
duties and responsibilities are handed over to the
Board of Directors formed under this Law.
40. Rules, procedures,
orders and directives issued under the Insurance
Business Law may continue to be applicable in so
far as they are not inconsistent with the provisions
of this Law.
41. For the purpose
of carrying out the provisions of this Law: -
(a) the Ministry may issue rules and procedures, with
the approval of the Government;
(b) the Ministry and Myanmar Insurance may issue orders
and directives.
42. The Insurance
Business Law (Pyithu Hluttaw Law No. 10 of 1975)
is hereby repealed.
Sd./ Than Shwe
Senior General
Chairman
The State Law and Order Restoration Council
Bangkok
Office :
Burma
Lawyers' Council
P.O. Box 29, Hua Mark Post
Office, 10243, Bangkok Thailand,
E- Mail : blcsan@ksc.th.com
for
additional information about our branches click
here
