Insurance Regulatory Unit Resolution No. 38 of 2023 Issuing the Rules Regulating the Activity of Central Insurance Repositories

Insurance Regulatory Unit Resolution No. 38 of 2023
Issuing the Rules Regulating the Activity of Central Insurance Repositories

Article One

Pursuant to the provisions of Clause (22) of Article (10) of Law No. (125) of 2019 on Insurance Regulation, the Rules Regulating the Activity of Central Insurance Repositories set out in Annex No. (1) to this Resolution are hereby issued.

Article Two

The Executive Regulations of Law No. (125) of 2019 on Insurance Regulation shall be amended in accordance with Annex No. (2) to this Resolution.

Article Three

The competent authorities, each within its own jurisdiction, shall implement this Resolution, which shall come into force from the date of its issuance and shall be published in the Official Gazette.

Annex No. (1)
Rules Regulating the Activity of Central Insurance Repositories

Article 1 – Preliminary Provisions

These Rules aim to regulate the business of Central Insurance Repositories and to set out the procedures and conditions for obtaining a licence and the controls for its continuation.

Article 2 – Definitions

Any of the words and expressions contained in these Rules shall have the meanings assigned to them in Law No. (125) of 2019 on Insurance Regulation, its Executive Regulations and their amendments, and in the list of terms used therein, unless the context of the text requires otherwise. For the purposes of these Rules, wherever the following words appear, they shall mean the following:
1- (The Law): Law No. (125) of 2019 on Insurance Regulation.
2- (The Executive Regulations): the Executive Regulations of Law No. (125) of 2019 on Insurance Regulation and their amendments.
3- (The Unit): the Insurance Regulatory Unit.
4 – (The Rules): the Rules Regulating the Activity of Central Insurance Repositories.
5-(Central Insurance Repository): the company licensed under these Rules.
6- (Member of the Central Insurance Repository): an insurance company licensed under the Law and contracted with the Central Insurance Repository under these Rules.
7- (Policyholder): every person for whose benefit an insurance policy has been issued by Members of the Central Insurance Repository.
8- (Beneficiary): the person to whom the benefit specified in the insurance policy accrues upon the occurrence of the damage or loss.
9- The term (Electronic Insurance Account) (EIA) means the account allocated by the Central Insurance Repository to each policyholder and beneficiary, in which the insurance policies issued by Members of the Central Insurance Repository are kept in digital form.

Article 3 – Regulation of the Activity of the Central Insurance Repository

The Unit shall be competent to regulate the activity of the Central Insurance Repository concerned with providing ancillary services to the insurance sector and such tasks as the Unit assigns to it in light of the Unit’s competence set out in the Law and its Executive Regulations. The person licensed to carry on this activity shall be deemed a (self-regulatory legal entity) having the right to issue rules and systems within the scope of the competences and tasks it exercises, all of the foregoing subject to the approval of the Unit.

Article 4 – Objectives and Scope of the Activity of the Central Insurance Repository

1- Establishing Electronic Insurance Accounts (EIA) for all insured persons and beneficiaries for the registration of insurance policies issued by Members of the Central Insurance Repository.
2- Depositing and keeping insurance policies issued by Members of the Central Insurance Repository electronically and in digital format; verifying the efficiency, transparency and accuracy of insurance policies; working to reduce the costs of their issuance, deposit, keeping and maintenance; and registering all amendments and changes relating thereto.
3- Registering and keeping all rights arising from risk underwriting, compensation and transfer of insurance policies, all of the foregoing by means of electronic and digital registration.
4- Acting as a central counterparty for the settlement of the recovery balances of Members of the Central Insurance Repository by digital and electronic means.
5- Registering pledge rights over life insurance and capital formation policies issued by Members of the Central Insurance Repository.
6- Providing services for the establishment and maintenance of insurance pools for the benefit of Members of the Central Insurance Repository by digital and electronic means.
7- Managing and maintaining the insurance database provided for under the Law and its Executive Regulations; requesting, collecting, analysing, classifying, using and circulating insurance information; preparing the Insurance Record of insured persons; issuing the insurance information report and the insurance rating of policyholders and beneficiaries; and preparing and developing risk tools and standards and matters relating thereto.
8- Any services or business that the Unit deems appropriate.

Article 5 – Licensing and Registration Requirements

No person may establish or manage a Central Insurance Repository, assist in its establishment, or announce that he is doing so, except after obtaining a licence issued by the Unit in accordance with the conditions and restrictions set out in these Rules.
In all cases, the business of a Central Insurance Repository may not be carried on except by a person registered in the register prepared for that purpose at the Unit.

Article 6

A special register shall be prepared at the Unit in which shall be registered the data of the Central Insurance Repository whose registration is approved in accordance with the provisions of these Rules, and the following data and any amendments thereto shall be entered in the register:
1- The name of the Central Insurance Repository.
2- The registration number and date.
3 – The legal form and the amount of capital.
4-The names, nationalities and shareholdings of the shareholders.
5- The address of its head office and of its branches, if any.
6-The names of the members of the Board of Directors and of the executive management, and the limits of the powers granted to each of them.
7-The number and date of the commercial licence.
8- Reserves in all their statutory and voluntary forms.
9- The name of the auditor(s).
10- Any other data that the Unit decides to enter in the register.
11- Any amendments made to the foregoing data.

Article 7

Subject to Law No. (1) of 2016 Promulgating the Companies Law and its amendments, the following shall be required in order to carry on the business of a Central Insurance Repository:
1- The applicant shall be a shareholding company in accordance with the provisions of the aforementioned Companies Law.
2- The issued capital of the company shall not be less than (KWD 25,000,000) twenty-five million Kuwaiti dinars, and in all cases the issued capital shall be paid in full upon incorporation.
3- The objects and purposes of the company shall be limited to the business of a Central Insurance Repository provided for in these Rules.
4- The ownership structure shall include the participation of one or more insurance companies that meet the membership conditions provided for in these Rules, provided that the (direct and indirect) ownership of an insurance company shall not exceed 10% of the issued capital of the Central Insurance Repository or 10% of the issued capital of the insurance company, whichever is lower. An exception may be made to the prescribed percentage limits after obtaining the prior approval of the Unit.
5- Any other requirements determined by the Unit.

Article 8

Applications for the establishment of Central Insurance Repositories shall be submitted to the Unit, including the following data and documents:
1. The name and address of the licence applicant, including the automated (PACI) number, and the identity number if a natural person or the commercial registration number if a legal person.
2- A market and feasibility study for the establishment of the company, including its purposes and services, the mechanism for pricing services, and the organisational structure of the company.
3- Copies of the proposed memorandum of incorporation and articles of association of the company, and a statement of the names, qualifications, experience and share of each of the founders.
4- Signed declarations by the founders of the company that, during the five years preceding the submission of the licence application, no final judgments have been issued against them declaring them bankrupt or convicting them by a final judgment of a crime involving dishonour or breach of trust, or imposing a custodial penalty for any of the crimes provided for in the Law or any other law, unless they have been rehabilitated.
5- The value of the company’s capital.
6-The proposed name of the company.
7- A receipt for payment of the application review fee prescribed in the Executive Regulations.
8- Any other information, data or documents requested by the Unit.

Article 9

The Unit shall review the establishment application and may exempt the applicant from some of the requirements or impose additional requirements. The Unit may notify the applicant of the need to submit any additional information or documents to ascertain that the company that will carry on the activity has the following:
1- The capability and competence required to carry on the activity that is the subject of the licence application.
2- Sufficient resources to carry on the activity that is the subject of the licence application.
3- Sufficient managerial expertise, technical resources, systems, and operational policies and procedures to carry on the activity that is the subject of the licence application.
4- The members of the Board of Directors and the members of the executive management shall be persons who possess the necessary qualifications, skills and experience approved by the Unit.
If the applicant fails to submit the required documents and information within the period specified for him by the Unit in the notification without an excuse acceptable to the Unit, the application shall be deemed not to have been submitted.

Article 10

The Unit shall decide on the establishment application within (60) sixty days from the date of receipt of the application complete with all information and documents, determining whether to grant initial approval for the establishment of the company or to reject it, taking into account the extent of the market’s need for the establishment of the requested company and the suitability of the applicant’s major shareholders.

Article 11

Upon completion of the company’s incorporation procedures, the company shall submit to the Unit an application for a licence to carry on the activity of a Central Insurance Repository and for registration in the register prepared for that purpose at the Unit, after payment of the fee prescribed in the Executive Regulations. The following documents shall be attached to the application:
1- The resolution of the Ministry of Commerce and Industry approving the incorporation of the company
2- A copy of the articles of association and memorandum of incorporation after notarisation.
3- The opening balance sheet approved by the auditor.
4- A copy of the minutes of the company’s General Meeting appointing the Board of Directors, and the resolutions issued by the Board of Directors electing the Chairman of the Board and appointing the Chief Executive Officer of the company and the members of the executive management, after fulfilment of the requirements provided for in these Rules.
5- Submission of proof of the availability of the systems, equipment and technical means necessary for the performance of the company’s business, including the following:
a. Advanced and secure means of communication for keeping and exchanging data and information.
b. The availability of protection and security systems for all the company’s assets, ensuring full protection of data and information.
c. Work procedure manuals, and risk management policies and procedures, including procedures for mitigating operational risks and any legal risks that may be associated with its activity.
d. Disaster response and data and information recovery plans in case of emergency.
6- Any other documents or data requested by the Unit.

Article 12

1- The Unit shall issue a resolution registering the company in the register and licensing it to provide Central Insurance Repository services within (30) thirty days from the date of receipt of the application complete with all information, documents and conditions; the company shall be notified thereof and it shall be published in the Official Gazette. The company is prohibited from carrying on the activity before the final licence and its registration in the register.
2- The licence shall remain valid for three years from the date of its grant and shall be renewed upon an application submitted by the company, provided that the renewal application is submitted no less than (3) months before the expiry of the licence, together with payment of the fee prescribed in the Executive Regulations.
If the licence application / licence renewal application is rejected, the decision shall be reasoned, and the person whose application has been rejected shall have the right to file a grievance within the time limits specified in the Executive Regulations and after payment of the fee prescribed therefor.

Article 13

The continued validity of the licence shall be conditional upon the Central Insurance Repository remaining at all times capable of and fit for carrying on its operations in the State of Kuwait. The Unit may, by written notice, revoke the licence granted to the Central Insurance Repository in accordance with the provisions of the Law, its Executive Regulations and these Rules, with effect from the day specified in the Unit’s resolution, in any of the following cases:
1. Loss of any of the conditions that qualified it to obtain the licence.
2. If it ceases to perform the tasks entrusted to it or that it is licensed to manage.
3. Liquidation of the Central Insurance Repository.
4. Its failure to perform any obligation imposed on it by the Law, its Executive Regulations, the resolutions and circulars issued by the Unit, and these Rules.
5. Its failure to provide the information requested by the Unit, or its provision of incorrect or misleading information.
6. Its making any amendments to its objects in its memorandum of incorporation or articles of association without obtaining the prior approval of the Unit.
7. If the Central Insurance Repository requests the revocation of the licence granted to it.
The Unit shall publish the licence revocation resolution in the Official Gazette, and the Central Insurance Repository may file a written grievance against the revocation resolution in accordance with the procedures specified under the Law, the Executive Regulations and these Rules.

Article 14

Subject to the provisions of the Companies Law, the Central Insurance Repository may not suspend, cancel or change its activity, undertake any merger or acquisition procedures in another company, effect any change in control, or take any action—whatever its form or designation—that would affect the ownership structure, except after obtaining the prior approval of the Unit.

Article 15 – Notification Requirements

Subject to the cases requiring the prior approval of the Unit, the Central Insurance Repository shall notify the Unit of the following:
1. Within (15) fifteen days at most from the date of any change in the address of the head office or the chosen domicile at which correspondence and notifications are served, attaching the automated (PACI) number.
2. Within (7) seven days from the date of incorporating, acquiring, selling or dissolving a subsidiary, or of any changes occurring in the information submitted to the Unit concerning the branch offices through which the Central Insurance Repository carries on its activity.
3. Within (7) seven days of the appointment, dismissal or resignation of the auditor.
4. Notifying the Unit of the agenda, date and venue of the meeting of the ordinary and extraordinary General Meeting—accompanied by all documents relating to the items included in the agenda—at least (15) fifteen days before the meeting is held.
5. Providing the Unit with a certified copy of the minutes of the meeting of the ordinary and extraordinary General Meeting—as the case may be—in addition to proof of entry of the resolutions of the extraordinary General Meeting in the Commercial Register, within a maximum period of (15) fifteen days from the date the meeting is held.
6. Notifying the Unit—immediately—of any cases of non-compliance by Members of the Central Insurance Repository with the rules and systems issued by it, or if it assesses the existence of a financial irregularity or any other matter that may indicate the insolvency of the Member or its inability to meet its obligations provided for in the Law, its Executive Regulations and these Rules.

Article 16 – Financial Position Accounts of the Central Insurance Repository

The Central Insurance Repository shall appoint one or more external auditors from among the auditors registered with the Unit.
In all cases, its financial statements shall be prepared in accordance with the accounting policies and the International Financial Reporting Standards, and shall be provided to the Unit in accordance with the provisions of the Law, its Executive Regulations and these Rules.

Article 17

The financial year of the Central Insurance Repository shall begin on 1 January and end on 31 December of each year, except for a new company, whose first financial year shall begin on the date of its entry in the Commercial Register and end on 31 December of the same year. The Central Insurance Repository shall submit its financial statements in accordance with the detailed controls for the preparation of financial reports determined by the Unit, signed by the Chairman of the Board of Directors or whoever acts on his behalf and audited by the company’s auditor, in the Arabic language, as follows:
a. Within (90) ninety days from the end of the financial year.
b. Within (45) forty-five days from the end of the interim (quarterly) period.

Article 18

The Central Insurance Repository shall submit to the Unit an annual report within ninety days from the end of its financial year, including in particular the following:
1. A report containing a description of the activities carried out by the Central Insurance Repository during the past year in terms of the financial and human resources available to it.
2. The audited financial statements, including the report of the external auditor.
3. Any other reports determined by the Unit.

Article 19 – Supervision and Oversight Fees

The Central Insurance Repository shall pay all the fees prescribed for the examination and licensing of the company and the annual supervision and oversight fees to the Unit as provided for in the Executive Regulations and the resolutions issued by the Unit in this regard.

Article 20 – Governance of the Central Insurance Repository

a. The Central Insurance Repository shall have documented governance arrangements that clearly and directly define the structure of its Board of Directors, its functions, the allocation of responsibilities and the reporting lines. The Unit shall take the governance arrangements into consideration upon licensing, and the Central Insurance Repository shall disclose such arrangements to its Members and to other stakeholders in the Central Insurance Repository, such as employees, creditors, suppliers, customers, agents and service providers.
b. The documented governance arrangements of the Central Insurance Repository shall include the arrangements necessary to achieve its governance objectives, to develop its governance policies, and the procedures for overseeing such policies and systems, monitoring their implementation and effectiveness, and amending them when
necessary.
c. The policies and procedures of the Board of Directors of the Central Insurance Repository shall include procedures for identifying, addressing and managing potential conflicts of interest of the members of the Board of Directors of the Central Insurance Repository.
d. The number of members of the Board of Directors of the Central Insurance Repository shall not be less than (5) members, and the composition of the Board of Directors shall include one or more independent members, provided that the proportion of independent members is not less than one fifth and does not exceed one half of the members of the Board of Directors.
e. The members of the Board of Directors of the Central Insurance Repository shall have a clear understanding of their roles in governance, shall be able to devote sufficient time to the performance of their duties, shall be able to develop their skills on an ongoing basis, and shall have sufficient incentives to perform their roles.
f. The Unit may delegate one or more representatives in the capacity of observer to attend the meetings of the Board of Directors of the Central Insurance Repository, to ensure the application of the provisions of the Law, its Executive Regulations, the relevant laws and these Rules.

Article 21 – Requirements for Holding Positions and Offices at the Central Insurance Repository

1. The following shall be required of any person who is a member of the Board of Directors of the Central Insurance Repository, or the head of its executive management or his deputies or assistants, and likewise for continuing to hold any of these positions:
a. He shall not have been convicted by a final judgment of a crime involving dishonour or breach of trust, or relating to money laundering and terrorist financing, or of corruption crimes.
b. He shall not have previously been dismissed from his job or position by a disciplinary decision issued by a government entity or a regulatory authority, or by virtue of a final judgment.
c. He shall not have been declared bankrupt.
d. He shall be of good conduct, good reputation and good behaviour.
2. Subject to the time limits set out in Clause (4) of Article (15), the legal representative shall notify the Unit of the names of the candidates for membership of the Board of Directors of the Central Insurance Repository at least thirty days before the date set for the convening of the General Meeting to elect the members of the Board of Directors, and the Unit shall likewise be notified of the names of the candidates to fill the aforementioned positions.
3. The Unit may, within twenty-one days from being notified, object by a reasoned decision to any of these candidates for failure to meet the required conditions.
4. Such objection shall result in the exclusion of the candidate for membership of the Board of Directors or for filling any of these positions, as the case may be. No candidate of whom the Unit has not been notified, or any candidate against whom an objection has been made in accordance with the provisions of this Article, may be presented to the General Meeting of the Central Insurance Repository.
In all cases, the Unit may request the Board of Directors of the Central Insurance Repository to remove any of the persons referred to in the first paragraph if, during his tenure of office, he ceases to meet any of the conditions set out in this Article; and if the removal is not effected, the Unit may issue a reasoned decision excluding him from his position or job.

Article 22

A candidate for membership of the Board of Directors of the Central Insurance Repository shall meet one of the following conditions:
1. He shall hold a university qualification or a qualification from the applied institutes, and shall have experience as follows:
a. For university qualifications in economic, legal, administrative or technical sciences: seven years of experience in the banking, financial or insurance field; and for other university qualifications: ten years of experience in the banking, financial or insurance field.
b. For holders of a qualification from applied institutes specialised in economic, legal, administrative or technical sciences: ten years of experience in the banking, financial or insurance field; and for other applied qualifications: twelve years of experience in the banking, financial or insurance field.
2. Or he shall have previously held membership of a board of directors for a period of at least six years in well-known local or foreign banks or financial institutions, or in public institutions or financial or economic public bodies.
3. Or he shall have held, for a period of at least three years, leadership jobs or positions in well-known local or foreign regulatory, banking or financial institutions, where the competence of such jobs or positions is connected with the core activities of the institution.
If the candidate does not meet the condition set out in Clauses (2) and (3), his aggregate experience in holding board membership and in holding leadership jobs and positions in banking or financial institutions combined may be taken into account, such that his aggregate experience in those fields is a minimum of six years.

Article 23

The following conditions shall be met by any person appointed as head or member of the executive management:
1. He shall hold a university qualification in economic, legal, administrative or technical sciences.
2. He shall have experience of not less than ten years, of which at least seven years shall be experience in banking, financial, insurance or technical affairs, provided that he has spent at least five years thereof in key executive positions in those fields.
3. He shall have the technical and leadership capabilities that qualify him to hold this position.
A member of the executive management who shall be subject to the conditions set out in this Article means the persons who carry out the core work related to the objects and activities of the Central Insurance Repository according to the Articles of Association, where such competence is connected with the head of the executive management according to the approved organisational structure.

Article 24

The Unit may take the necessary measures to verify the availability of the technical and leadership capabilities that qualify the candidates provided for in the preceding Articles of these Rules, including conducting a personal interview with the candidate if so required.

Article 25 – Allocation of Responsibilities

a. The governance arrangements shall ensure sufficient independence of the key functions, such as risk management and internal audit.
b. The Central Insurance Repository shall establish appropriate arrangements to maintain a clear and appropriate allocation of key responsibilities between
the management body and senior executives in order to achieve the following:
1. Identifying who is responsible for each function.
2. Adequate monitoring and supervision of its business and affairs by the management body and senior executives.
3. Avoiding unlawful or unauthorised transactions, and limiting the execution of a given transaction in its entirety by a single employee acting alone.
4. Periodic review of responsibilities and duties to limit the likelihood of conflicts of interest.
c. The Board of Directors of the Central Insurance Repository shall arrange the allocation of responsibilities in accordance with Paragraph (b) of this Article, and it shall oversee the
establishment of the control systems and procedures and oversee their implementation.

Article 26 – Board Committees

a. The Central Insurance Repository shall form, at a minimum, the committees provided for in Paragraph (b) of this Article and any other committees determined by the Unit, and such committees shall be composed of suitable members possessing skill, experience and knowledge of the activities and business of the Central Insurance Repository, provided that each committee includes at least one independent member.
b. The Board of Directors of the Central Insurance Repository shall form the following committees, at a minimum:
1. The Audit Committee; the Chairman of the Board of Directors may not participate in this committee.
2. The Risk Committee; the Chairman of the Board of Directors may not participate in this committee.
3. The Nominations and Remuneration Committee; this committee shall not be chaired by the Chairman of the Board of Directors or by any of the executive members of the Board of Directors.
These committees, and any other committees that the Board of Directors deems appropriate, shall have clearly defined responsibilities and procedures, and all decisions issued by them and the grounds on which such decisions were issued shall be documented.
c. The Unit may impose any conditions or restrictions on membership of the committees emanating from the Board of Directors of the Central Insurance Repository, including requiring that the Unit’s prior approval
be obtained for the composition of their members.

Article 27 – Internal Audit Function

The internal audit function of the Central Insurance Repository shall have clear responsibilities and powers, shall be equipped with sufficient resources, shall be staffed by competent and specialised individuals, and shall report to the Audit Committee and enjoy independence and direct access to the Board of Directors. This function shall be responsible for independently evaluating and examining the internal operating systems, in addition to identifying and analysing potential operational risks in accordance with the professional rules and standards of internal audit, and submitting recommendations and reports to senior management and the Audit Committee or the Board of Directors.

Article 28 – Risk Management Function

The risk management function of the Central Insurance Repository shall have clear responsibilities and powers, shall be equipped with sufficient resources, shall be staffed by competent and specialised individuals, and shall report to the Risk Committee and enjoy independence and direct access to the Board of Directors. This function shall be responsible for identifying, assessing and classifying risks in line with the strategic objectives, in addition to monitoring the effectiveness and efficiency of the control systems and the ability of the Central Insurance Repository to address risks, and updating the risk register on a periodic and continuous basis.

Article 29 – Compliance Function

The compliance function of the Central Insurance Repository shall have clear responsibilities and powers, shall be equipped with sufficient resources, shall be staffed by competent and specialised individuals, and shall report to the Chief Executive Officer and be sufficiently independent of senior management and other departments. This function shall be responsible for ensuring the compliance and adherence of the Central Insurance Repository with all laws and legislation issued by the Unit and the relevant regulatory authorities, and the adherence of the Central Insurance Repository and its Members to the rules issued by the Central Insurance Repository, in addition to preparing and implementing the plans relating to the compliance function so as to ensure that the regulatory requirements are met, and reviewing the contractual obligations of the Central Insurance Repository and other relevant legal requirements. It shall be responsible for implementing the requirements of the Anti-Money Laundering and Combating the Financing of Terrorism Law and the legislation issued by the Unit in this regard.

Article 30 – Outsourcing to External Parties

a. The Central Insurance Repository may, after obtaining the prior approval of the Unit, assign specific tasks to an external party. When assigning material tasks to an external party, the following shall be complied with:
1. Establishing appropriate safeguarding arrangements, including:
a. The responsibilities and roles of the Board of Directors and senior executives of the Central Insurance Repository.
b. Assessing whether the assigned party is suitable to perform the function or task subject of the assignment, taking into account the degree of responsibility involved.
c. Clear documentation of the extent and limits of the assignment, the obligations and responsibilities of the parties, and the standards of information confidentiality.
d. Establishing appropriate arrangements for overseeing the assignment and monitoring the performance of the functions or tasks by the assigned party and ensuring their continuity, and that such party implements business continuity requirements similar to those imposed on the Central Insurance Repository.
e. Establishing criteria for assessing the risks of assigning the external party and measures to mitigate them, ensuring that the assignment of the external party does not impede the Unit from effectively supervising the Central Insurance Repository, its business, its operations or its compliance with the Law, its Executive Regulations and these Rules.
f. Taking appropriate corrective measures upon the emergence of any deficiency in the level of performance of the party assigned the functions or tasks.
2. The Board of Directors of the Central Insurance Repository shall ensure that the tasks assigned to external parties meet all the requirements that would have to be met if they were performed internally at the Central Insurance Repository. The Central Insurance Repository shall have stringent arrangements for selecting external parties, closely monitoring their performance and the mechanism for replacing them, and the Central Insurance Repository shall provide all the information necessary to enable the Unit to assess the extent to which the performance of such tasks by the external parties complies with these Rules.
b. The assignment by the Central Insurance Repository of any function to an external party shall not diminish its legal obligations under the licence granted by the Unit, and it shall bear legal liability towards the Unit and any other party for the work assigned to the external party.
In all cases, the Central Insurance Repository shall, when wishing to assign any function or task to an external party, obtain the prior approval of the Unit.

Article 31 – Policies, Procedures and Rules of the Central Insurance Repository

The Central Insurance Repository shall establish manuals of the internal policies, procedures, rules and systems governing the relationship between the Central Insurance Repository and its Members and any related person, after their approval by the Unit, all in a manner that ensures compliance with the Law, its Executive Regulations and these Rules, and shall review them periodically so as to ensure the soundness and proper conduct of work at the Central Insurance Repository, in particular the following:
1. The organisational chart, with its objectives and the competences of its organisational units, which clearly defines the limits of authority, powers and responsibility within the Central Insurance Repository relating to the Board of Directors, executive management and the various other key support functions, in addition to defining the administrative levels and powers relating to approving the conclusion of transactions, the payment of expenses and financial outlays, and the procedures for authorising operations and transactions.
2. Control systems and internal control programmes.
3. Human resources, training and development policies and procedures.
4. Policies and procedures for preventing conflicts of interest.
5. Policies and procedures for preventing information leakage.
6. Policies and procedures for protecting persons who report unlawful practices at the Central Insurance Repository.
7. Risk management policies and procedures.
8. Anti-money laundering and combating the financing of terrorism policies and procedures.
9. Compliance policies and procedures.
10. Policies and procedures for contingency plans and business continuity monitoring.
11. Corporate governance policies and procedures.
12. Policies, procedures and rules of professional conduct for members of the Board of Directors and executive management.
13. Complaints handling policies and procedures.
14. Comprehensive information security and physical security policies, procedures and systems for dealing with potential vulnerabilities and threats.
15. The Central Insurance Repository rulebook, which includes an accurate description of the policies and procedures for the provision of services and the documentary cycle to be followed in completing work, the conditions for joining the Central Insurance Repository and the obligations of its Members, and the expenses and fees for the services provided.
16. Any other policies, procedures or documents required by the Unit.

Article 32 – Obligations to Establish and Operate the Systems of the Central Insurance Repository

The Central Insurance Repository shall provide the latest equipment and technical means necessary for establishing and operating systems and databases in accordance with international best practices in the field of information security and risk management, and shall take the measures that ensure the preservation of the security and confidentiality of information and data and prevent their misuse or access to them by unlawful means or by unauthorised persons, taking into account the following:
1. Not storing or keeping any information or data relating to insurance information subjects with any entity except after obtaining
the prior approval of the Unit.
2. Keeping the insurance information and data contained in the Insurance Record for a period of not less than ten years.
3. Establishing a physical security system for the site of the databases and operating systems covering all risks.
4. Establishing an alternative emergency centre for the Central Insurance Repository to deal with any potential risks or disasters, and conducting the periodic tests necessary to ensure the readiness of the emergency centre.
5. Adopting backup systems and establishing plans for the secure recovery of information and data and for business continuity in case of emergency.
6. Providing secure means of communication for the exchange, storage and retrieval of information and data.
7. Providing protection systems for software and databases, and establishing a contingency plan to deal with intrusions.
8. Establishing effective operational controls to tighten oversight of the procedures for using automated systems and databases and of the permissions to access them.
9. Any other conditions and controls determined by the Unit.

Article 33 – Risk Centralisation Management Obligations at the Central Insurance Repository

The Central Insurance Repository shall establish a risk centralisation system relating to policyholders who are insurance information subjects, to be approved by the Unit, in order to provide a numerical assessment on aggregate and statistical bases relying on Know Your Customer information and the current and historical insurance behaviour of the policyholder or beneficiary, for the purpose of determining the degree of underwriting risk in respect of the risks related to him, and shall prepare unified forms regulating the following:
1. A unified digital Know Your Customer form for determining anti-money laundering and combating the financing of terrorism risks.
2. A digital form for inquiries and for the insurance information reports issued by the Central Insurance Repository, and specifying the procedures to be followed in this regard.
3. Data and information forms for insurance information subjects, to be complied with by users of insurance data and information, in accordance with procedures that ensure their completeness and accuracy.
4. Forms for adopting corrective measures for any error in data and information resulting from their collection and processing, and establishing appropriate mechanisms for notifying the persons concerned of such errors.
5. Any other forms determined by the Unit.

Article 34 – Rules and Conditions of Membership of the Central Insurance Repository

The Central Insurance Repository shall have Members from among the following entities:
1. Insurance companies, reinsurance companies and branches of foreign companies (conventional/takaful) licensed under the Law and its Executive Regulations.
2. Other entities whose membership is accepted by the Central Insurance Repository in accordance with the conditions and terms approved by the Unit.

Article 35

A Member of the Central Insurance Repository shall have the following on a continuous basis:
1. Sufficient financial resources to meet its obligations arising from membership.
2. The staff, technical capabilities, books, records, systems and procedures necessary for dealing with the activity of the Central Insurance Repository.
3. A valid licence issued by the Unit.

Article 36

The Central Insurance Repository shall observe the rules of equality among Members in similar positions, including with respect to the fees and expenses it charges and the services it provides.

Article 37

A Member of the Central Insurance Repository shall conclude a written agreement with the Central Insurance Repository in accordance with the form prepared by the Central Insurance Repository and approved by the Unit, provided that it includes the Member’s commitment to the following:
1. Observing the rules, systems and procedures of the Central Insurance Repository, and any amendments made thereto after the approval of the Unit.
2. Paying the fees and expenses for the services provided to it by the Central Insurance Repository, and compensating the Central Insurance Repository for any breach of its rules, systems and procedures.
3. Providing the data and information related to the services provided to it by the Central Insurance Repository, and establishing their soundness to the Central Insurance Repository.
4. Implementing the resolutions of the Board of Directors of the Central Insurance Repository relating to the services it provides.
The agreement shall specify the method for settling any disputes that may arise between its parties.

Article 38

The Board of Directors of the Central Insurance Repository shall set the rules on the measures it takes with respect to its Members in the event of their violation of the operating systems of the Central Insurance Repository, and such rules shall not be effective until approved by the Unit.

Article 39

A Member of the Central Insurance Repository shall lose its membership status in the following cases:
1. Bankruptcy of the Member or cessation of its legal personality.
2. Revocation of the Member’s licence to practise the activity licensed to it by the Unit.
3. Revocation of membership by a resolution of the Unit due to the Member’s violation of the provisions of the Law, its Executive Regulations or the resolutions issued in implementation thereof.
4. Loss of any of the membership conditions stipulated in these Rules.
In all cases, the Central Insurance Repository shall notify the Unit thereof within ten days.

Article 40

All insurance policies issued by a Member of the Central Insurance Repository shall be subject to the central system of the Central Insurance Repository, and the deposit receipt with the Central Insurance Repository shall be deemed evidence of the validity of the insurance policy and of the conditions, exclusions and endorsements it contains.
All insurance policies shall be recorded in the electronic accounts established with the Central Insurance Repository and allocated to each policyholder or beneficiary.

Article 41

Members of the Central Insurance Repository shall comply with the following:
1. Providing the Central Insurance Repository with the insurance data and information of their customers in accordance with the procedures and rules issued by the Central Insurance Repository.
2. Adapting their systems in force so as to ensure the submission of their customers’ data and insurance information to the Central Insurance Repository, and bearing responsibility for its accuracy, completeness and updating in accordance with the forms and mechanism consistent with the operating systems in force at the Central Insurance Repository.
3. Notifying the Central Insurance Repository of any legal proceedings taken in respect of their customers within a period not exceeding (10) working days from the date the action is taken, in accordance with the systems in force at the Central Insurance Repository.
4. Notifying customers of their insurance information in accordance with the contents of the insurance information report.
5. Providing the Central Insurance Repository with the data and balances of recovery amounts due from the other Members of the Central Insurance Repository.
6. Feeding the risk centralisation system of the Central Insurance Repository with Know Your Customer data upon initiating the establishment of the relationship with the customer.
7. Feeding the system of the Central Insurance Repository with the data and information relating to underwritten insurance policies, premiums paid, and indemnities paid and under settlement.
8. Any other obligations determined by the Unit.

Article 42

A Member of the Central Insurance Repository shall have records for each type of insurance and its branches, all of which shall be kept with the Central Insurance Repository, in which shall be entered the names of policyholders, their nationalities and domiciles, the types and branches of insurance contracted thereunder, the value of the premiums paid in consideration thereof, and the value of the indemnities resulting therefrom.
Any changes to the data entered in the policyholders’ records shall be annotated therein in accordance with the data received by the Member or the Central Insurance Repository.
Subject to the confidentiality of information, any interested party may request the Member or the Central Insurance Repository to provide it with data from this record.

Article 43 – Confidentiality of Information

All information and data in the possession of the Central Insurance Repository shall be deemed confidential by nature and shall not be used except for the purposes of the activities of the Insurance Regulatory Unit, the Central Insurance Repository and insurance information users in accordance with the Law, its Executive Regulations and these Rules, and may not be accessed or disclosed, directly or indirectly, as the case may be, except with the approval of the Unit or of the insurance information subject, his heirs, his legal representative or the agent authorised to that effect, or upon a request from the competent judicial authorities.

Article 44 – Supervision of the Central Insurance Repository

The activities of the Central Insurance Repository shall be subject to the oversight of the Unit for the purpose of monitoring its compliance with the Law, its Executive Regulations and these Rules and with the instructions issued by the Unit in this regard; to that end, the Unit may review and inspect the business of the Central Insurance Repository and its information systems to verify the soundness of their performance and the efficiency of operational risk management.

Article 45

The Unit shall have the right to obtain all data and information in the database of the Central Insurance Repository, and the Central Insurance Repository may request to obtain the data and information available to the Unit in its systems or which are to be collected from licensed persons, in accordance with what the Unit determines in this regard.
Upon the termination of the Central Insurance Repository, the data, information, records and reports held by it shall devolve to the Unit.

Article 46

The Disciplinary Board shall examine and decide on disciplinary accountability cases referred to it and brought by the Chairman of the Unit relating to the violation by the Central Insurance Repository of the provisions of the Law, the Executive Regulations and these Rules and any resolutions or circulars issued thereunder.

Annex No. (2)
Amendment of the Executive Regulations of Law No. 125 of 2019 on Insurance Regulation

Fee Schedule in Article (19) after Amendment

Issued on 21 September 2023 and published in the Official Gazette Kuwait Al-Youm on 24 September 2023.