The Ministry of Finance and four foreign insurance companies signed a memorandum of understanding Tuesday to establish a joint venture to offer life insurance services, local media reported Wednesday.

The government will hold 50 percent of shares in the firm, which has 7 million U.S. dollars in capital, while Singapore's NTUC (National Trade Union Committee) will possess 20 percent, and PT Asuransi Central Asia of Indonesia, the Asia Insurance Company Hong Kong and the Bangkok Insurance Public Limited will share the remaining capital, according to The Cambodian Press Review.

NTUC plans to conduct a six to 12 month study on the need for life insurance services, NTUC Executive Director Tan Kin Lian said, stressing the importance of such a study before beginning operations.

"We know that Cambodian people have low income. But we also know they have families, so we think they need life insurance services," he said. "First of all, we will try to offer reasonably cheap services. When the living standards improves, we think a high price will be acceptable," he added.

Hang Chuon Narun, secretary-general of the Ministry of Finance, said the insurance sector can help people further their education in a sustainable manner and secure living conditions for retired citizens.

The newly founded firm will act as "the most significant service to develop Cambodia," he added.

Cambodia now has four insurance companies, but none offers life insurance services.

Source: Xinhua

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