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The Social Insurance Law and its amendments promulgated by the Royal Decree No.72/91 came into force with effect from July 1, 1992. One of its articles stipulated that a public authority shall be formed under the name of "Public Authority for Social Insurance (PASI)" enjoying administrative and financial independence, to be responsible for the implementation of this law. The law aims at providing social protection thereby ensuring peace of mind and social stability for the insured and his/her dependents.

PASI launched its activity by implementing the first insurance branch, namely the insurance against old age, disability and death followed by various stages including insurance against work injuries and occupational diseases in addition to providing insurance coverage to the nationals employed abroad and the like. PASI has also set up seven branches in Salalah, Sohar, Nizwa, Ibri, Buraimi, Ibra and Sur, which form the link between PASI and the establishments working in remote areas far from PASI 's headquarters in order to facilitate its services to the employers, employees and the beneficiaries under the provisions of this law.