The Insurance Regulatory Unit has issued a resolution concerning rules for issuing mandatory insurance policies in Kuwait, excluding civil liability insurance resulting from traffic accidents (compulsory vehicle insurance).
Some provisions in the new regulation include:
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Insurers must add an acknowledgment and undertaking clause to the general terms and conditions of the mandatory insurance policy, stating that the insured/participant has reviewed and is aware of all terms, conditions, guarantees, and coverage limits of the insurance policy. Once the insured/participant pays or agrees to pay the insurance premium/subscription, this constitutes acceptance of all the terms, guarantees, and limits contained in the insurance policy.
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The mandatory insurance policy must contain a QR code (Quick Response Code) indicating the following minimum information: (policy number, policy schedule, insurance amount, general terms, guarantees, deductibles, special terms, premium/subscription amount, insurance broker/agent information, appendices, debtor notice, coverage period, and date of issue.
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The insurer is obligated to refund the premium/subscription amount to the insured/subscriber if it is not possible to complete the compulsory policy issuance process for any reason.
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When issuing policies, the insurer must state the company's policy and procedures for policy cancellation and include them in the general conditions of compulsory insurance policies, along with a statement of the rights and responsibilities arising from the cancellation process for the insurer and the insured/participant.
- When canceling a policy, the insurer is obligated to do the following:
1. State the formula and method of calculating the amount due/refunded from the insurance premium/subscription to the insured upon cancellation of the policy.
2. Refund the remaining premium/subscription amount for the remaining days to the insured/participant, without deducting fees, expenses, or compensation if cancellations are made by the insurer, provided that the cancellation is justified.
3. The insurer is obligated to notify the insured/participant upon cancellation of the policy, stating the notification period in a manner that does not conflict with applicable laws, even if issued through an insurance broker/agent in accordance with the law.
4. The insurer is obligated to cover the insured/participant during the notification period upon cancellation of the insurance policy.
5. Any cancellations by either party shall not be valid unless the notification is made in writing to the other party or through one of the approved electronic means.
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Cash transactions are prohibited under any circumstances. The value of compulsory insurance policies, the payment of commissions to the insurance broker or insurance agent, and the payment of compensation shall only be through electronic payment methods, bank transfers, or cheques.
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When examining a claim submitted to it, the insurer shall inquire from the claimant about the existence of any other insurance policies related to the same compensation. To this end, the insurer may require the claimant to submit a declaration stating that they have not received any compensation or that there is any other coverage for the same compensation. If the claimant acknowledges coverage from another insurance company, it has the right to request a certificate issued by the other insurer stating that it has not paid compensation for the same claim.
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The insured company and the insured/participant are prohibited from agreeing to reduce the limits of liability for what is stipulated in the regulations of the relevant authorities or restricting any person's right to claim.
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Insured companies are obligated, when issuing mandatory insurance policies, not to grant commissions exceeding 15% of the amount of the insurance premium/subscription.
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When pricing a mandatory insurance policy, the insured company must ensure that the rate is not less than the value determined by the actuary for the company or its reinsurance agreement.
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It is permissible to agree on additional insurance coverage not included in the compulsory insurance policy, or to increase the limits of these responsibilities and coverages under a separate policy or under an additional supplement in exchange for a premium/subscription agreed upon between the insurer and the insured/participant.
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Upon receiving any claim related to compulsory insurance policies, the insurer is obligated to do the following:
1. Notify the applicant by any approved written or electronic means immediately upon opening the claim file and identify all documents received and data not received that must be completed to estimate the compensation due and complete the claim settlement.
2. Notify the claimant by any of the approved written or electronic means within a period not exceeding five business days from the date of completion of the documents of the claim's acceptance.
3. Settle and pay the claim amounts fairly and without any bargaining with the affected party within a maximum period of 10 business days from the date of claim acceptance.
4. In the event that the claim is rejected, the insured company is obligated to provide the claimant with the reasons for rejection in writing or electronically, accompanied by the documents and papers supporting the rejection decision.
The new regulation shall take effect on the date of its publication in the Official Gazette.
The head of the IRU, Mr Mohammad Al-Otaibi, said in a media statement that the resolution aims to facilitate document tracking through technology, reduce fraud and raise awareness of the rights and obligations of all market participants. He added that the decision also eliminates pricing disparities among companies by unifying the mechanism for calculating premiums, which is detailed in the resolution and its annexes, thereby reinforcing transparency between insurers and clients.