Muscat: The insurance sector in Oman has reacted positively to the new insurance companies' law.
"The new insurance companies' law amendment issued last week will bring about a positive change in the market. From now on, only genuine players will be in the field," a source told Times of Oman.
There are 22 insurance companies, including locally-run companies, companies from other Gulf Cooperation Council countries and from other foreign countries.
According to the new amendment, the insurance companies should have a minimum OMR10 million as paid-in capital and the company should be a public joint stock company.
The amendment also says that the public joint stock company should be established as per the Commercial Companies Law to practice the insurance business and the licence applicant has to ensure that the paid share capital is not less than OMR10 million.
"Only companies that have SAOG status will be allowed to operate," the source added.
"Raising the paid up capital from OMR5 million to OMR10 million and instructing the companies to be listed in stock market will restrict companies that are not serious," the source added.
According to the source, only a few companies may be able to afford the paid up capital of OMR10 million and this could lead to mergers or acquisitions.
"Many companies may have to merge to meet the present criteria or will have to shut down their
"Meanwhile, companies with a base in other GCC countries or other countries abroad have to comply with the present laws and have to restructure their licence names and operations," the
According to the Royal Decree, a new Article adds that the Central Market Authority (CMA) board may allow a reconciliation in the crimes mentioned under this law, bye-laws or its executive decisions if it has the right to file a criminal case and before the judgement is rendered in this regard against payment of a sum of money that should be less than double of the minimum limit of the fine determined for this crime and not more than the maximum limit.
In the event of reconciliation the criminal case would be cancelled.
The amendment also stated that the companies that are currently in business will be granted a grace period of three years to adjust their positions and the provisions of this law shall be in force from the day that followed the publication in the Official Gazette.
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