Supreme Committee of the Insurance Regulation Unit now established in Kuwait
On 30 January 2020 the Kuwaiti Minister of Commerce and Industry issued a decision (No,24/2020) forming the Supreme Committee ("Committee") of the Insurance Regulation Unit ("IRU").
The establishment of the Committee was foreshadowed in Article 7 of Kuwait Law No.125/2019 on the regulation of insurance ("Insurance Law") which came into effect only last year.
Duties of the Committee
The Committee was established, pursuant to the Insurance Law, to oversee the development and supervision of the insurance sector in Kuwait. Article 10 of the Insurance Law sets out a list of 21 specific duties which the Committee are required to undertake. These include, most notably:
- Reviewing applications to establish insurance and re-insurance companies in Kuwait and granting licences to practice insurance activities.
- Applying international standards for the supervision of the insurance sector and ensuring that companies licensed within Kuwait abide by local and international insurance rules.
- Approving rules, regulations and procedures which regulate the granting and revocation of licences to exercise insurance and re-insurance activities in Kuwait, along with those of the 'supporting professions'. We note that 'supporting professions' are not defined within the Insurance Law, although this may be clarified within the Implementing Regulations which are to be prepared by the Committee (see below).
- Establishing an institute within Kuwait for the provision of qualified insurance professionals.
- Identifying risks for which obtaining insurance is compulsory.
- Establishing a database regulating operations carried out by licenced insurance companies within Kuwait.
- Preparing the Implementing Regulations, which are integral to the operation of the Insurance Law. The anticipated release of the Implementing Regulations is currently unknown.
The Insurance Law also specifies that the Committee has the power to issue a decision revoking the licence of any company carrying out insurance activities in Kuwait in the following circumstances:
- The company's registration is found to be in contravention of the Insurance Law.
- In the event that company is taken over and all activities within Kuwait are transferred to another company.
- The company suspends its activities in Kuwait.
- The company is rendered bankrupt.
- The company's activity is suspended by the IRU on more than 1 occasion in a 2 year period.
- The company does not rectify any violations committed within 30 days of their notification.
The affected company has the opportunity to respond to the Committee's decision within 30 days of notification. Following which it is the IRU who take the final decision to revoke the company's licence.
The Committee comprises seven members who are required under the Insurance Law to meet at least six times a year. The Committee is chaired by the Chairman of the IRU, with the other members comprising: (i) the Vice President of the IRU; (ii) three part-time members, all experts within the field of insurance; (iii) a representative of the Central Bank of Kuwait; and (iv) a representative of the Ministry of Commerce and Industry.
Following the formation of the Committee, the members will now meet to prepare a set of regulations which will govern the Committee's activities.
The Insurance Law was passed in 2019 with a view to refreshing the insurance regime in Kuwait; the previous law having been issued in 1961 and last updated in 1981. The establishment of the Committee has been eagerly awaited since the Insurance Law was passed and is likely to be a welcomed development for insurance practitioners in the region.
For further information on the above, please contact:
Partner and Head of Insurance, Middle East
T +971 4 423 0530
Rula Dajani Abuljebain
Managing Partner, Kuwait
T +971 4 423 0502
T +971 4 423 0510
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