The Executive President of the Capital Market Authority, H.E. Abdullah Bin Salem Al Salmi stated that the issuance of the licensing requirements for third party administrators (TPAs) represent an important move to enhance the regulation of the health insurance sector in Oman. The TPAs play an important role in the ecosystem, by providing outsourced post-sales administrative services to insurance companies by facilitating cost effective claims operations with high efficiency and quality, while ensuring a seamless and pleasant consumer experience to the insured policyholders, when seeking covered treatment from health service providers.
H.E. the Executive President stated that the issuance of the regulatory requirements for carrying out TPA business as per Decision No. 34 /2020 will add to the readiness of the infrastructure of the insurance industry in the Omani market, improve quality of services related to health insurance and complete the legislative and regulatory framework of the health insurance scheme for the employees of the private sector, expatriates residing in Oman and the visitors.
He added, the issuance of the regulation is in response to the growth in the health insurance market in the Sultanate. In 2019, the health insurance topped amongst the insurance products, recording 35% of the total insurance market. This amounted to RO 170 million of health insurance market. The sector witnessed considerable growth in the past five years by more than 25% year-on-year growth, and we expect that health insurance products will see more turnout, thanks to the increased public awareness of the role of insurance in providing healthcare for the employees of the private sector, further to the Government’s policy of furnishing insurance coverage for this category.
H.E. the Executive President talked about the key features of the regulations, pointing out that it is flexible in specifying the requirements for licensing to carry out the business in accordance with best global practices and in line with the needs of the Omani market. The regulations allowed the licensee to render the service for more than one insurance company and outlines the framework forcontracting health service providers. The requirements took into consideration the ease of investment by nationals,promoting Omanisation and investment in human resources by opening opportunities for fresh graduates from local colleges and universities. Furthermore, it will promote workforce development through structured training and development to cater to the demands of the industry with the required mix of medical insurance and finance knowledge.
H.E. Al Salmi added that the key features include, the need to explicitly cope with the required state-of-the-art technology to improve internal systems that will be integrated with the health insurance portal of the CMA, while ensuring the privacy and security of data and information. The CMAs Dhamani portal will be the centralized health insurance exchange platform that will integrate and link the regulator(s), insurers, TPAs, private health institutions, insured members and all other relevant stakeholders to seamlessly interact and conduct all transactions electronically, thereby improving efficiency and reducing administrative overhead costs.
The regulations include the requirements for the licensees to comply with the regulatory procedures of the CMA such as, ensuring the minimum capital requirement which is RO 200,000 and streamlining the objective of the company to solely focus on Third Party Administrative services with minimum overlap with the functions of brokers and agents. The TPAs are required to have a full time manager with university degree in medicine, health care or insurance with no less than 5 years of experience after completion of thedegree in addition to having a full time doctor with no less than 5 years of experience.
It is noteworthy that the regulations were issued after due consultation with all the stakeholders in the market including government entities, insurance companies and private health institutions. The draft regulations were posted for consultation and feedback through the CMA’s website for the professional, academics, law firms, investors, and the public in view of duly completing the consultatory process.