Middle East - Qatar: Central Bank issues new rules for insurers
Source: Middle East Insurance Review | May 2016
The Qatar Central Bank (QCB) has issued new instructions for the insurance sector stipulating that listed insurance companies must have a capital of above QAR100 million (US$27.5 million) or a risk-based capital, among other requirements. The new instructions went into force in April.
Unlisted insurance companies must have a capital higher than the figure set by the QCB or the risk-based capital. Branches of insurance companies must deposit QAR35 million.
The instructions also define the business controls for insurance companies and other issues, including notifications and precautionary reports to the Central Bank, as well as topics related to senior owners and changes in ownership in insurance companies, supervision of the group, conversion of business, cessation of insurance business, and the transition period for overall application.
The new instructions are the first of their kind which regulate the insurance industry in the state comprehensively. All insurance, reinsurance, takaful and retakaful companies as well as branches of foreign insurance companies in the country are required to adjust their positions according to the decision, QCB said in a statement, adding that the instructions have been issued in accordance with basic principles of insurance issued by the International Association of Insurance Supervisors, and international standards.
These instructions are credit positive as they will strengthen several credit characteristics, including capital, asset quality and reserve adequacy, said Moody’s Investors Service.
QAR1 = US$0.27