Published: Feb 14, 2024

Navigating Regulatory Reform: Advancements in Oman’s Insurance Sector

The Oman insurance industry is regulated and supervised by the Capital Market Authority (“CMA”), established by Royal Decree 80/98 issued on 9 November 1998 and commenced its duties on 9 January 1999. It is a government entity that enjoys juristic personality, as well as financial and administrative independence.

CMA announced several legal and regulatory developments in relation to the insurance sector over the last 6 months, aimed at achieving the objectives set out in the Tenth Five Year Development Plan 2021 – 2025. CMA was particularly busy during October 2023 when it issued three regulations within a span of three days, as well as a policy in January 2024. They are as follows:

  • Regulation for Bancassurance on 10 October 2023;
  • Regulation for E-Insurance on 12 October 2023;
  • Regulation for Health Insurance Electronic Link on 12 October 2023.
  • Unified Credit Life Policy on 4 January 2024

All these regulations and policies help to achieve CMA’s strategic objectives, which according to the 2022 Annual report, include enhancing the financial sustainability level, achieving an average growth of 10% annually in the insurance indices, raising the level of insurance awareness to 25% of the total population by 2025 as well as increasing the level of CMA’s performance efficiency (regulatory and procedural).

The Regulation for Bancassurance

On 10 October 2023, CMA published a new regulation governing the bancassurance business in the Sultanate pursuant to Decision No. E/84/2023. The new provisions are aimed at strengthening relations between insurers and banks, promoting better consumer protection and limiting unhealthy practices in the marketing of bancassurance products.

The regulation came into force 90 days after its publication in the Official Gazette, on 8 January 2024.

Bancassurance is defined under the regulation as “marketing insurance products through banks’ branches and networks”. It means that rather than a traditional distribution channel of promoting insurance products through an intermediary such as an insurance broker, bancassurance is a partnership between a bank and an insurer offering insurance products to the bank’s customers.

According to Article (2) under the General Provisions of the regulation, insurance companies or Takaful companies licensed by the CMA must obtain CMA’s prior approval before marketing bancassurance products.

In relation to advertising and promotional material for marketing bancassurance products, the regulation requires all documents related to these products to be printed on the insurers’ papers and clearly showing the name of the insurer, and that the bank is only a marketing channel.

The regulation further confirms that the responsibilities of issuing the policy, authorizing claims settlement and claims payment as well as crediting the insurance premium in the bank account remain with the insurer. These responsibilities cannot be delegated to the banks.

In addition, while it is allowed for insurers to tie-up with one or more banks for marketing general insurance and life insurance (Family Takaful), it is prohibited for more than one insurer to tie-up with the same bank to market the life insurance activity or the same branch to market general insurance activities or related to SMEs.

Regulation for E-Insurance

On 12 October 2023, CMA published a new regulation governing e-insurance business in the Sultanate. The e-insurance regulation applies to both licensed insurers as well as brokers. E-insurance operations is defined under the regulation as “the insurance businesses carried out by the company or the broker through the internet or electronic or smart systems.”

The regulation calls for the concerned parties to adjust their practice in accordance with provisions therein within 120 days from the date of its implementation i.e., before 9 February 2024.

The regulation requires CMA’s prior approval before being able to provide e-insurance services or carry out e-insurance operations. To obtain approval, it is necessary to submit an application to CMA and provide a business plan, which include an analysis of the expected volume of electronic insurance operations during the first three years, an analysis of risks and measures, and a specialized human cadre to manage the platform, in addition to a media marketing plan, among others.

The regulation also imposes an obligation on the insurers to develop an e-insurance platform to provide services such as marketing and selling insurance policies, collecting insurance premium, accepting claims, dealing with complaints.

In addition, the regulation sets out extensive provisions around the obligations of the insurer and the broker as service providers, particularly around the security, confidentiality, and privacy of data information.

Regulation for Health Insurance Electronic Link

On 12 October 2023, CMA published a new regulation governing the electronic connectivity of the health insurance system in the Sultanate pursuant to Decision No. E/83/ 2023. The regulation came into force 30 days after its publication in the Official Gazette, on 11 November 2023.

The new regulatory regime aims to ensure the quality of health care provided to citizens and residents in addition to limiting misuse of benefits included in the policy. The electronic connectivity will work to ensure obtaining approval promptly and dealing with claims electronically.

The health insurance system was rolled out via the Dhamani Electronic Platform. This was a significant milestone for the sector as the platform is now the unified channel in which all health insurance practitioners execute health insurance transactions and exchange information, from the inception of an insurance policy until its expiry. Health insurance practitioners include insurers, health service providers and health insurance third party administrators.

As an initial step, the health insurance practitioner must first register to gain access to Dhamani by way of submitting an application to CMA. There are also extensive obligations in delivering services on the platform as a registered user including those on data collection, processing, and protection.

Insurance of the Unified Credit Life Policy

The Unified Credit Life Policy was issued on 4 January 2024 pursuant to Decision No. E4/2023 and shall have effect as from 1 June 2024.

In Oman, a prerequisite for obtaining a loan from the banks of the Sultanate is proof of the borrower’s life insurance. To this end, the Unified Credit Life Policy confirms an obligation on the insurer to pay the loan outstanding balance under a Credit Contract for any medical condition on the part of the borrower which lead to death or total permanent disability, provided the death or disability occurs after four (4) years from the effective date of the insurance policy.

The policy applies to Credit Contracts. A Credit Contract is defined under the policy as “loan contract between the beneficiary and the insured made in written of electronic form stipulating repayment of the loan in accordance with the terms and conditions specified in the contract”.

The beneficiary is the bank or financial institution in whose favor the insurance is made and whereby obtains the loan outstanding balance in the event of occurrence of the insured risk on the insured. The insured, on the other hand, is the natural person who is obligated to pay the insurance premium and is covered under the policy as regards death or total permanent disability or any additional benefits e.g., the borrower.

In addition, the Unified Credit Life Policy reinforces the principle of good faith, which is based on transparency and disclosure. Notably, there are express exclusions under the Unified Credit Life Policy for cases of intentional forgery of the papers and documents issued by official entities or medical reports. It also makes detailed provisions around indemnity, insurance premium, policy cancellation, claims settlement, jurisdiction, and exclusions.


The aforesaid legislative mandates and endeavours demonstrate CMA’s effort in updating the regulations in line with regional and global developments and strengthening the regulatory framework under which all insurance activities are conducted, taking into consideration the uniqueness of the Sultanate of Oman in a way to safeguard and protect the rights of all stakeholders in the financial sector.

How can we help?

There have been many instances of customers taking undue advantage of the legal landscape to make unscrupulous claims against their credit insurance policies based on misleading health declarations, and the new standardized wordings should certainly help in curbing this down. Our team is well equipped to advise on these new regulatory developments as well as to assist with the implementation of these changes and to align the internal systems of the insurers to make them compliant. Please do contact us should you need any further details or wish to discuss these matters.