Kuwait: Changes to insurance law to double minimum capital to $33.3 mln
Source: Middle East Insurance Review | Feb 2018
Draft changes to Kuwait’s insurance law provide for the minimum capital of a life or non-life insurer to be KWD10 million (US$33.3 million), double the current required minimum of KWD5 million.
The amendments also provide for the establishment of an Insurance Supervisory Authority (ISA) to regulate the industry.
The draft, presented by lawmaker Mr Askar Al-Enezi, defines the scope and functions of the ISA. It would issue regulations for insurers, reinsurers, brokers, agents, actuaries, assessors and other experts; protect the rights of policyholders; license local and foreign insurance and reinsurance entities in the Kuwaiti market; and ensure that insurers maintain adequate reserves and are able to meet claims and obligations in a timely manner.
The ISA shall determine supervision fees and fines that may be imposed on insurance companies, agents and brokers.
The draft law, which would modernise the current legislation which dates to 1961, also stipulates that the Authority shall publish statistical data on the Kuwaiti insurance market and set out rules for the investing of insurers’ funds.
The proposed amended law also requires takaful operators to maintain two separate accounts, one for shareholders and the other for subscribers. Their capital may not be increased or reduced without the approval of the ISA. Also insurance entities must comply with the Corporate Governance Act and International Accounting Principles.
The ISA shall be governed by a board of directors composed of: the Minister of Commerce and Industry as Chairman; Director of the Authority as Vice Chairman; a representative of the Association of Insurance Companies and four other members with experience in insurance and reinsurance selected by the Council of Ministers. The Board shall also appoint a full-time actuarial expert to help in the work of the ISA.
The insurance sector is at present supervised by the Insurance Department of the Ministry of Commerce and Industry. The authorities have been working on the new insurance law since 2012. M