History of Insurance, Market Development and Regulation in Seven Least Developed Countries in Asia: Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Myanmar and Nepal

Abstract

This paper examines the history of market development and regulation in the insurance markets of seven Least Developed Countries in Asia. Historical analysis shows that most of the markets were first developed to service expatriates and the interests of expatriates then operating in those countries but disappeared or were nationalized soon after their independence as a sovereign state. All countries have adopted or are in the process of adopting market-oriented economic policies and insurance business has begun to re-emerge. Findings from the investigation of insurance regulation and supervision show that all governments apparently apply principle of national treatment in the markets, but the application is not perfect as they commonly not only impose no statistically justified rules but also apply politics-oriented guidelines and unclear capital, investment and accounting regulations on licensed companies. The reinsurance markets are either undeveloped or are subject to compulsory cession to government insurer or its designee. They also lack clear exit (insolvency) regulation and policyholder protection guidelines.