A Chapter From - Regional Practical Guidance - Insurance – Oman
Transport & Insurance Focus
Oman's insurance sector operates under a structured regulatory framework overseen by the FSA. The FSA's comprehensive oversight encompasses insurers, reinsurers, brokers, agents, and other intermediaries, ensuring the market's stability and integrity
Law Update: Issue 376 – Transport & Insurance
Anand SinghSenior Counsel, Transport & Insurance
Veena ShankarParalegal, Transport & Insurance
This article is part of a regional regulatory guide for the insurance sector, focusing on the Sultanate of Oman. It provides an overview of Oman's insurance regulatory framework, highlighting key aspects such as licensing, capital requirements, intermediary regulations, outsourcing rules, foreign branch operations, and dispute resolution procedures. This guide aims to assist stakeholders in understanding and navigating the regulatory environment of Oman's dynamic insurance market.
What is the name of the main regulator(s) governing insurance in this jurisdiction? The Financial Services Authority (“FSA”) is the primary regulatory body overseeing the insurance, reinsurance and takaful operations in Oman. Established by Royal Decree 20/2024, the FSA assumed the responsibilities previously held by the Capital Market Authority (CMA), including the regulation and supervision of insurance companies and intermediaries.
What are the main areas which they regulate?The FSA regulates various aspects of the insurance industry, including:
Licensing and Supervision: Overseeing the establishment and operation of insurance companies, brokers, agents, and other intermediaries.
Prudential Regulation: Ensuring financial stability through capital adequacy and solvency requirements.
Market Conduct: Monitoring business practices to protect policyholders and ensure fair treatment.
Product Approval: Reviewing and approving insurance products offered in the market.
Consumer Protection: Handling complaints and ensuring mechanisms are in place for dispute resolution.
Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT): Implementing measures to prevent financial crimes within the insurance sector.
Does Oman have any other independent jurisdiction that function separate from the onshore jurisdiction? No, Oman does not have separate financial free zones or jurisdictions that operate independently from the federal regulatory framework. All insurance activities are regulated uniformly under the FSA across Oman.
Oman's insurance sector operates under a structured regulatory framework overseen by the FSA. The FSA's comprehensive oversight encompasses insurers, reinsurers, brokers, agents, and other intermediaries, ensuring the market's stability and integrity.
Are there limits or requirements for outsourcing operations to third-party vendors, particularly for critical functions?While specific details on outsourcing regulations for insurance companies in Oman are not extensively detailed in the available sources, it is generally expected that:
Regulatory Approval: Insurers should seek prior approval from the FSA before outsourcing critical functions.
Due Diligence: Companies must conduct thorough assessments of third-party vendors to ensure they meet required standards.
Risk Management: Insurers remain responsible for the outsourced functions and must have measures in place to manage associated risks.
Data Protection: Compliance with data protection laws is essential, ensuring policyholder information remains confidential and secure.
How are foreign branches regulated in your jurisdiction?Foreign insurance companies can establish branches in Oman but must:
Secure authorization from the FSA to operate within Oman.
Demonstrate solvency margin, financial stability in line with FSA regulations.
Adhere to Omani insurance laws and regulations, including those related to governance, reporting, and consumer protection.
What are capital requirements for an insurance company in the UAE? The capital and additional deposit requirements as applicable for insurance companies and other insurance related professionals are set out below:
Re/insurance Companies: Must hold a minimum paid-up capital of OMR 10,000,000 submitted in form of bank guarantee.
Re-Takaful Companies: Must capital not less than OMR 2,000,000 allocated to shareholders fund in the re-takaful activity, submitted in form of bank guarantee.
Foreign branch insurance company must maintain capital of OMR 5,000,000, submitted in form of bank guarantee. In addition to this capital requirement, the foreign branch insurance company must deposit at least OMR 75,000 with the FSA if it offers one type of insurance, or OMR 150,000 if it offers more than one type.
Insurance Brokers must maintain minimum capital of OMR 100,000, submitted in form of bank guarantee. In addition to the capital requirement, the insurance Brokers are required to submit addition deposit in form of bank guarantee in favor of the FSA depending on the licensing activity. For broker permitted to carry out direct broking business, bank guarantee of OMR 75,000 should submitted, for reinsurance broking, OMR 150,000 and OMR 200,000 for composite broking i.e direct and reinsurance broking.
Health insurance claim administration company must maintain minimum capital of OMR 200,000.
Is there a statute of limitations on insurance claims? If so, what is it? Under Omani law, the general statute of limitations for contractual claims, including insurance claims, is 15 years from the date the cause of action arises, as per Article 340 of the Oman Civil Code. However, specific types of insurance policies may have different limitation periods outlined within the policy terms.
What mechanism do insurance policies usually provide for resolution of coverage disputes?Insurance policies in Oman typically include provisions for dispute resolution, such as:
Internal Dispute Resolution: Encouraging policyholders to resolve issues directly with the insurer.
Mediation: Utilizing neutral third parties to facilitate mutually acceptable solutions.
Arbitration: Many policies contain arbitration clauses, allowing disputes to be settled by arbitrators.
Litigation: As a last resort, disputes can be taken to Omani courts for resolution.
As the insurance landscape in Oman continues to evolve, staying informed about regulatory developments is crucial for all stakeholders. Our legal team is equipped to provide guidance on licensing, compliance, corporate structuring, and dispute resolution within Oman's insurance sector. For tailored legal support, please contact us.
For further information,please contact Anand Singh andVeena Shankar.
Published in April 2025
