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Insurance Regulatory Unit Resolution No. 21 of 2021
Issuing the Executive Regulations of Law No. 125 of 2019 on Insurance Regulation
Issuance Articles
Article One
The Executive Regulations of Law No. (125) of 2019 on Insurance Regulation, the provisions of which are attached to this Resolution, are hereby issued.
Article Two
All persons subject to the provisions of Article (2) of Law No. (125) of 2019 on Insurance Regulation shall regularise their status in accordance with the provisions of the Law and these Regulations within a period of one year from the date of publication of this Resolution.
Article Three
Licences to practise the activity issued by the Unit to persons subject to the provisions of Article (2) of Law No. (125) of 2019 on Insurance Regulation and its Executive Regulations attached to this Resolution shall continue in effect, provided that the validity of these licences shall expire on 31/03/2022.
Article Four
Resolutions issued by the Unit shall remain in force to the extent that they do not conflict with the provisions of the Executive Regulations attached to this Resolution.
Article Five
All entities, each within its competence, shall implement this Resolution, which shall come into force from the date of its publication.
Executive Regulations of Law No. (125) of 2019 on Insurance Regulation
Part One: General Provisions
Chapter One: Definitions
Article 1
The words and expressions contained in these Regulations shall have the meanings set out in the Insurance Regulation Law, and the following words and expressions shall have the meaning shown opposite each of them, unless the context requires otherwise:
1- Competent Minister: the Minister of Commerce and Industry.
2- Ministry: the Ministry of Commerce and Industry.
3- Unit: the Insurance Regulatory Unit.
4- Committee: the Higher Committee of the Unit.
5- Law: Law No. (125) of 2019 on Insurance Regulation.
6- Regulations: the Executive Regulations of Law No. (125) of 2019 on Insurance Regulation.
7- Person: a natural or legal person.
8- Licensed person: a natural or legal person holding one or more licences from the Unit to carry on the activities regulated under the Law and these Regulations.
9- Insurance companies: Kuwaiti shareholding companies and branches of foreign companies licensed to carry on insurance business in accordance with the provisions of the Law and these Regulations.
10- Reinsurance companies: Kuwaiti shareholding companies and branches of foreign companies licensed to carry on reinsurance business in accordance with the provisions of the Law and these Regulations.
11- Takaful insurance companies: Kuwaiti shareholding companies and branches of foreign companies licensed to carry on takaful insurance operations in accordance with the provisions of the Law, these Regulations and the provisions of Islamic Sharia.
12- Takaful reinsurance companies: Kuwaiti shareholding companies and branches of foreign companies licensed to carry on takaful reinsurance operations in accordance with the provisions of the Law, these Regulations and the provisions of Islamic Sharia.
13- Branches of foreign insurance companies: branches of foreign insurance companies licensed to carry on insurance operations in the State of Kuwait.
14- Insurance and reinsurance pools: arrangements established between licensed companies for the purpose of managing a particular class of insurance or a particular operation for a joint account.
15- Conventional insurance policy: an insurance contract between the insurance company and the insured under which the insurance company undertakes, in consideration of an insurance premium, to indemnify the insured for the damage and losses covered thereunder or to pay the sum insured to the person insured or the beneficiaries on the basis of the insurance policy.
16- Takaful insurance policy: an insurance contract aimed at achieving the principle of solidarity and cooperation among the participating members on the basis of their bearing the risks to which any of them is exposed and their cooperation in making good the damage, in accordance with the rules set out in the company’s articles of association and the conditions contained in the insurance policy, in a manner that does not conflict with the provisions of Islamic Sharia.
17- Reinsurance: the transfer by an insurance company of part or all of the risk it has underwritten to another insurance company or to a reinsurance company.
18- Takaful reinsurance: the transfer by a takaful insurance company of part or all of the risk it has underwritten to another takaful insurance company or to a takaful reinsurance company.
19- Policyholders: every person who has acquired the rights under an insurance policy originally, or to whom such rights have been finally transferred; this does not include a transferee whose rights are subject to a condition restricting his acquisition of those rights absolutely, and it includes each of the following:
20- Insured: the person who has contracted with the insurance company under insurance policies in force.
21- Participant: the person contributing a share under a takaful insurance policy who undertakes to pay the contribution and who is entitled, or whose heirs or assignee in cases where assignment is permitted are entitled, to obtain the compensation or benefits provided by the participants’ account in the company.
22- Insurance brokerage companies: a company licensed to carry on the business of intermediation on behalf of policyholders with insurance companies in consideration of a percentage determined by these Regulations or by the resolutions or instructions issued by the Unit.
23- Reinsurance brokerage companies: a licensed company acting as an intermediary between the insurance company and the reinsurance company; while dealing with the reinsurance company, the reinsurance broker shall represent the insurance company.
24- Insurance professions: actuaries, risk assessors and loss adjusters, insurance consultants and the insurance professions set out in Article (3) of these Regulations.
25- Insurance premium: the amount paid by the insured to the insurance company in consideration of the insurance policy.
26- Contribution: the consideration which the participant undertakes to pay to the participants’ fund in return for his participation in the takaful insurance account with the company, in order to compensate for damage or to pay benefits to those entitled.
27- Deposit: the insurance deposit which insurance companies and reinsurance companies are obliged to maintain either in cash deposited with one of the banks operating in Kuwait or in the form of other guarantees, as part of the guarantee of the solvency margin.
28- Solvency margin: the excess of the value of the company’s actual assets over its liabilities, enabling it to meet its obligations in full and to pay the compensation amounts required of it as soon as they fall due, without this leading to the faltering of the company’s business or the weakening of its financial position.
29- Mathematical reserve: a separate account which licensed companies are obliged to allocate for each class of insurance they carry on; they may be required to allocate it for one or more types of insurance falling within a single class. It may take one of the forms of the deposit.
30- Technical provisions: the provisions which licensed companies shall set aside and maintain as a guarantee to cover the financial obligations arising on them towards policyholders under the provisions of the Law and these Regulations.
31- Qard hasan (interest-free loan): interest-free cash support which the takaful insurance company is obliged to provide to the participants’ account when they suffer an insurance deficit.
32- Sharia Supervisory Board: an independent board formed within a takaful insurance or takaful reinsurance company to supervise the company’s transactions and the extent of their conformity with the provisions of Islamic Sharia.
33- Sharia auditor: an employee of a takaful insurance or takaful reinsurance company appointed by the company’s Board of Directors upon the recommendation of the Sharia Supervisory Board to audit and monitor the company’s compliance with the resolutions and opinions of the Sharia Supervisory Board.
34- Insurance information: the information contained in the Insurance Record.
35- Insurance information subject: the applicant for insurance, the insured, or the third party when submitting an insurance claim covered under an insurance policy.
36- Insurance Record: a record kept with the Unit in which the insurance information of the licensed person, whether a natural or a legal person, is entered.
37- Adverse insurance information: any insurance information that is against the interest of the insurance information user.
38- Adverse decision: any decision taken by the insurance information user against the interest of the insurance information subject on the basis of the Insurance Record.
39- Insurance information user: the person licensed for insurance or reinsurance activities, or the person licensed for insurance profession activities, who provides and exchanges insurance information with the Unit.
40- Insurance agent: the legal person who, for a financial consideration, represents the insurance company and markets and sells insurance policies, together with all the business he ordinarily carries out for the account of the insurance company or on its behalf.
41- Beneficiary: the person to whom the benefit specified in the insurance policy accrues upon the occurrence of the damage or loss.
42- Insurance claims management company: the legal person that manages, reviews and settles insurance claims on behalf of the insurance company.
43- Service providers: the persons and entities licensed by the competent authorities to provide services or benefits related to the subject matter of the insurance policy managed by the insurance claims management company.
44- Insurance consultant: the person who provides consultancy services relating to insurance and reinsurance activities.
45- Actuary: the person who applies the theory of probability and statistics on the basis of which services are priced, obligations are valued and provisions are formed.
46- Risk assessor and loss adjuster: the person who examines and inspects the subject matter of the insurance before it is insured, and inspects the damage after it occurs in order to ascertain the causes of the loss, assess its value and determine liability.
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) amended Clauses (36) and (39) and added Clause (47) “Central Insurance Repository”; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Chapter Two: Controls on Practising Insurance and Reinsurance
Article 2
The following persons carrying on insurance and reinsurance activities shall be subject to the provisions of the Law and these Regulations:
1- Insurance companies and reinsurance companies.
2- Takaful insurance companies and takaful reinsurance companies.
3- Insurance and reinsurance pools.
4- Branches of foreign insurance companies.
5- Persons carrying on the insurance professions specified in Article (3) of these Regulations.
Article 3
The following persons carrying on insurance profession activities shall be subject to the provisions of the Law and these Regulations:
1- Insurance brokers / reinsurance brokers.
2- Risk assessors and loss adjusters.
3- Insurance consultants.
4- Actuaries
5- Insurance claims managers.
6- Insurance agents.
7- Any other insurance profession determined by the Unit.
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) added Clause (7) “Central Insurance Repositories” and renumbered the last clause; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Article 4
The provisions of these Regulations shall apply to the following insurance and reinsurance activities:
1- Life insurance and capital formation operations activities, which include the following classes:
(a) Life insurance of all types, which includes all insurance operations whose purpose is the payment of specified sums by reason of death, disability, reaching a specified age or upon the expiry of the agreed term, or life insurance linked to investment instruments.
(b) Personal accident insurance linked to life insurance, which includes all personal accident insurance operations carried out by the company for the benefit of persons holding life insurance policies from the same company; in some cases health insurance falls under this class.
(c) Capital formation operations, which include all operations whose purpose is the formation of a capital sum payable on a specified date in consideration of a single premium or periodic premiums, without this being linked to the contingencies of life or death.
(d) The classes of life insurance and capital formation operations determined by the Unit.
2- General and property insurance activities, which include the following classes:
(a) Motor insurance: includes insurance against losses and liabilities relating to vehicles, excluding transport risks.
(b) Property insurance: includes insurance against losses resulting from fire, theft, explosions, natural phenomena and disturbances, and any other insurance falling within this class.
(c) Marine insurance: includes insurance of goods carried by sea and the associated liabilities of the carrier or handler, insurance of ships’ hulls and insurance of liabilities towards passengers and third parties, and any other insurance falling within this class.
(d) Aviation insurance: includes insurance of aircraft hulls, liabilities towards passengers and third parties and goods carried by air, and any other insurance falling within this class.
(e) Energy insurance: includes insurance of petroleum installations, petrochemical installations and other energy installations, and any other insurance falling within this class.
(f) Engineering and construction insurance: includes insurance of contractors’ risks, erection and construction risks, electrical and electronic equipment, machinery breakdown, and any other insurance falling within this class.
(g) Health insurance: includes insurance of medical costs, medicines and all medical and therapeutic services and supplies, and the management of medical programmes.
(h) Other general and property insurance classes determined by the Unit.
3- Liability insurance activities, which include the following classes:
(a) Personal accident insurance.
(b) Insurance against work injuries and occupational diseases.
(c) Employer’s liability insurance.
(d) Third-party liability insurance.
(e) Public liability insurance.
(f) Product liability insurance.
(g) Medical liability insurance.
(h) Professional liability insurance.
(i) Insurance against theft and burglary.
(j) Fidelity guarantee insurance.
(k) Insurance of money in safes and in transit.
(l) Other liability insurance classes determined by the Unit.
4- All other types and classes determined by the Unit.
Article 5
No contract may be concluded in any form whatsoever for any of the insurance and reinsurance activities or insurance professions mentioned in the Law and these Regulations except through persons licensed and entered in the Unit’s register according to their activities that are the subject of the contract.
The following shall be excepted therefrom:
1- Reinsurance activities of all types, in accordance with the list approved by the Unit.
2- Cases that require special technical expertise and necessitate the engagement of unregistered experts for a specified period, after obtaining the approval of the Unit.
Chapter Three: Insurance Database and Records
Article 6
The Higher Committee shall establish an insurance database regulating the insurance operations carried out by licensed persons, which shall be used in issuing the insurance records resulting from the receipt, retention and exchange of insurance information and data and insurance claims relating to the subjects and users of insurance information.
The Unit may prescribe any fees in consideration of the services relating to the provisions of this Chapter, under these Regulations.
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) amended this Article; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Insurance Record
Article 7
An Insurance Record shall be established with the Unit consisting of the information and data provided to the Unit by the insurance information user, and the Insurance Record shall contain all or any of the following information relating to the insurance information subject:
1- The name of the insurance information subject, his civil ID number and his actual residential address – including the automated (PACI) number – if he is a natural person, and the commercial licence number – including the automated (PACI) number – if he is a legal person.
2- Data on the insurance coverages of the insurance information subject, whether the coverage in force or expired coverages.
3- Data on the insurance claims of the insurance information subject that are under settlement, payable or settled.
4- Data on the rejected claims of the insurance information subject and the reasons for their rejection.
5- Data on insurance recovery claims.
6- Data on the claims of the insurance information subject in respect of which a final court judgment has been issued.
7- Any other data prescribed by the Unit.
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) amended this Article; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Obligations of insurance information users
Article 8
The insurance information user shall, on his own initiative, submit the insurance information to the Unit within (5) five working days from the date on which he came into possession of the insurance information, and he may not refrain from providing the Unit with the insurance information it requests.
Article 9
The Insurance Record may not be accessed or enquired about except after obtaining an authorisation from the insurance information subject.
Article 10
Any person who has accessed the Insurance Record may not use or benefit from the insurance information in any form whatsoever for purposes other than those for which he accessed the Insurance Record.
Article 11
The insurance information user may not provide the Unit with any insurance information which he knows contains errors or whose accuracy he has not been able to verify fully, and the insurance information user shall be responsible for any errors contained in the insurance information sent by him to the Unit.
Article 12
The insurance information user may not amend any insurance information that has been sent to the Unit except by requesting (the competent department) at the Unit to amend it, setting out the necessary justifications for the request for amendment and the documents proving the necessity of amending that information.
Article 13
The insurance information user may not provide the Unit with insurance information if it is the subject of a pending dispute or a pending complaint without notifying the Unit that such insurance information is the subject of a dispute or complaint.
Rights of the insurance information subject
Article 14
The insurance information subject shall be entitled to the following:
(a) To request to know the insurance information contained in his Insurance Record, and he may request a copy of his record held with the Unit.
(b) To request to know the name and address of the insurance information users and the persons who have enquired about his Insurance Record.
(c) To submit an objection to the Unit if his Insurance Record contains incorrect information.
Article 15
Where the insurance information user takes an adverse decision against the insurance information subject for a reason attributable wholly or partly to the insurance information contained in the Insurance Record, the insurance information user shall, within (5) five days from the date of the adverse decision, notify the insurance information subject – upon his request – with a notice containing the following information:
1- The reasons for taking the adverse decision.
2- A copy of his Insurance Record.
Chapter Four: Service Fees and Company Licences
Article 16
Licensed persons shall pay annual supervision and oversight fees to the Unit as follows:
1- Life insurance and capital formation activity: insurance companies shall owe (0.5%) five per thousand of the total direct premiums due from policyholders (whether collected or not) during the preceding year, and this percentage shall apply to reinsurance companies after deducting what has been ceded from the local market.
2- All other insurance activities: (0.5%) five per thousand of the total direct and written premiums during the preceding year, and this percentage shall apply to reinsurance companies after deducting what has been ceded from the local market.
3- Insurance brokerage and/or reinsurance brokerage activity of all types: a percentage of (2%) two per cent of the total commissions and fees collected during the preceding year.
4- Insurance claims management activity: a percentage of (3%) three per cent of the total commissions and fees collected during the preceding year.
The fees prescribed in this Article shall be remitted to the Unit – annually – within a maximum period of (60) sixty days from the end of the financial year of the licensed persons, and the Unit shall issue instructions on the procedures and controls relating to the remittance of these fees.
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) added Clause (5) “Central Insurance Repository activity”; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Article 17
The Unit shall collect the supervision and oversight fees payable by policyholders in accordance with the following table:
| Type of insurance policy | Fees in Kuwaiti dinars for the insured | Fees in Kuwaiti dinars for the beneficiaries of the insurance policy |
|---|---|---|
| 1- Policy of insurance against civil liability arising from traffic accidents. | KWD (1) for each insurance policy issued in favour of the insured, provided that its insurance cover does not exceed one year; the prescribed fee shall be multiplied according to the period of insurance cover for which the insurance policy is issued. | None |
| 2- Other insurance policies | KWD (500) for each beneficiary covered by the insurance cover of the insurance policy. |
The fees prescribed in this Article shall be remitted to the Unit – quarterly – within a maximum period of (10) ten days from the end of the period.
Late payment of fees
Article 18
A company that is late in paying the fees within the time limits mentioned in Articles (16) and (17) of these Regulations shall pay a fine of 0.25% (a quarter of one per cent) of the total amount due to the Unit for each day of delay.
If the delay continues for a period exceeding six months, the Unit may suspend the licence of the company in default of payment, while the Unit retains the right to claim the amount.
Unit service fees
Article 19
The following shall apply with respect to the fees to be collected upon submitting an application for any of the procedures prescribed in accordance with the provisions of the Law and these Regulations:
| No. | Type of service | Fees in Kuwaiti dinars |
|---|---|---|
| Register of insurance and reinsurance companies | ||
| 1. | Fee for examining an application for a licence for a national or foreign insurance company | 500 |
| Fee for licensing and registration of an insurance company | 10000 | |
| 3. | Fee for renewal of the licence and registration of the insurance company | 5000 |
| 4. | Fee for licensing and registration of a branch of a national insurance company | 1000 |
| 5. | Fee for renewal of the licence and registration of a branch of a national insurance company | 500 |
| 6. | Fee for licensing and registration of a branch of a foreign insurance company | 20000 |
| 7. | Fee for renewal of the licence and registration of a branch of a foreign insurance company | 5000 |
| Register of insurance brokers and/or reinsurance brokers | ||
| 8. | Fee for examining an application for an insurance broker licence | 100 |
| 9. | Fee for licensing and registration of an insurance broker | 1000 |
| 10. | Fee for renewal of the licence and registration of an insurance broker | 500 |
| 11. | Fee for licensing and registration of a branch of an insurance broker | 500 |
| 12. | Fee for renewal of the licence and registration of a branch of an insurance broker | 250 |
| Register of insurance agents | ||
| 13. | Fee for examining an application for licensing and registration of an insurance agent | 100 |
| 14. | Fee for licensing and registration of an insurance agent | 1000 |
| 15. | Fee for renewal of the licence and registration of an insurance agent | 500 |
| 16. | Fee for an application for a licence for a branch of an insurance agent | 500 |
| 17. | Fee for renewal of the licence of a branch of an insurance agent | 250 |
| Registers of insurance professions (actuaries, risk assessors and loss adjusters, insurance consultants) | ||
| 18. | Fee for examining an application for a licence for insurance professions | 100 |
| 19. | Fee for licensing and registration of insurance professions. | 500 |
| 20. | Fee for licensing and registration of a branch for insurance professions (for a juristic person) | 250 |
| 21. | Fee for renewal of the licence and registration of insurance professions | 250 |
| 22. | Fee for renewal of the licence and registration of a branch for insurance professions (for a juristic person) | 250 |
| Register of insurance claims managers | ||
| 23. | Fee for examining an application for a licence for an insurance claims management company | 100 |
| 24. | Fee for licensing and registration of an insurance claims management company | 3000 |
| 25. | Fee for renewal of the licence and registration of an insurance claims management company | 1000 |
| 26. | Fee for an application for a licence for a branch of an insurance claims management company | 500 |
| 27. | Fee for renewal of the licence of a branch of an insurance claims management company | 500 |
| Registers (auditors, Sharia audit firms) | ||
| 28. | Fee for registration in the register. | 250 |
| 29. | Fee for renewal of registration in the register. | 250 |
| Other fees | ||
| 30. | Annotation of an amendment of particulars in the register | 10 |
| 31. | Submission of a grievance against resolutions of the Unit | 250 |
| 32. | Fee for examining an application for transfer of insurance policies | 500 |
| 33. | Fee for examining an application for the acquisition of an insurance company | 500 |
| 34. | Obtaining copies of documents, records and minutes deposited with the Unit, or the fee for an official extract of the particulars entered in the register | KWD 5 for each document not exceeding 10 pages, plus 500 fils for each additional page. |
* Insurance Regulatory Unit Resolution No. 38 of 2023 (Kuwait Al-Youm, Issue No. 1654, 24 September 2023) amended the fee schedule by adding “Register of Central Insurance Repositories” and renumbering the items that follow; its application was temporarily suspended by Resolution No. 24 of 2024 (Kuwait Al-Youm, Issue No. 1718, 22 December 2024).
Part Two: Insurance Regulatory Unit
Chapter One: Establishment of the Unit
Article 20
A unit called (the Insurance Regulatory Unit) shall be established, subject to the supervision of the Competent Minister and enjoying financial and administrative independence within the scope of the competences it exercises and in accordance with what is determined by the Executive Regulations. Its Head and his Deputy shall be appointed by decree upon the submission of the Competent Minister for a period of four years renewable once, and the decree shall determine their remuneration.
Article 21
The Unit aims to achieve the following:
1. Regulating and supervising insurance activity in a manner characterised by fairness, transparency and competitiveness.
2. Developing insurance activity and its instruments in line with international best practices.
3. Providing protection to those dealing in insurance activity.
4. Applying policies that achieve fairness and transparency and prevent conflicts of interest.
5. Working to ensure compliance with the laws and regulations relating to insurance activity.
6. Raising public awareness of insurance activity and the benefits, risks and obligations associated with it, and encouraging its development.
Article 22
The Unit shall exercise its powers in accordance with the Law and these Regulations, and with the systems and resolutions issued by the Higher Committee in implementation of the Law and these Regulations.
Article 23
The Higher Committee shall be formed under the chairmanship of the Head of the Unit, with the membership of each of the following:
1. The Deputy Head of the Unit.
2. Three non-full-time members, to be appointed by a resolution of the Competent Minister for a term of four years renewable once; the resolution shall determine their remuneration.
3. A representative of the Central Bank of Kuwait.
4. A representative of the Ministry of Commerce and Industry.
Provided that the grade of the two members referred to in Clauses (3, 4) shall not be lower than the grade of Assistant Undersecretary or its equivalent.
Article 24
A member of the Committee shall be a natural person of Kuwaiti nationality, of integrity and with expertise in the insurance, financial or legal field, against whom no final judgment has been issued declaring him bankrupt or imposing a custodial penalty for a felony or for a crime involving dishonour or breach of trust. The Head of the Unit and his Deputy shall be persons with expertise in the field of insurance or finance who have worked in the field of insurance or finance for a period of not less than ten years.
Article 25
The membership of any member of the Committee shall terminate in the following cases:
1. Resignation, or replacement of the member by the entity that nominated him.
2. If he is absent from three consecutive meetings or four non-consecutive meetings within one year without an excuse accepted by the Committee.
3. If he loses any of the conditions of membership stipulated in the Law.
Article 26
The Committee shall meet at least six times a year at the invitation of the Chairman, or of his Deputy in his absence. The Committee may be convened to a meeting at the request of the Chairman or of at least three members of the Committee.
The Committee shall have a secretary from among the employees of the Unit, and the meetings of the Committee shall be recorded in minutes signed by the members present and the secretary.
The meeting of the Committee shall be valid only if attended by a majority of its members, provided that the Chairman or his Deputy is among them. Resolutions shall be issued by an absolute majority of the votes of the members present and, in the event of a tie, the side on which the Chairman voted shall prevail.
The Committee may invite to attend its meetings such experts and consultants on the subject of the meeting as it deems fit to seek the assistance of, without the right to vote when resolutions are taken. The Committee may also establish temporary advisory committees to which it entrusts the study of a particular matter within the competences specified in the Law and these Regulations.
Article 27
The Higher Committee shall be responsible for all matters relating to the growth and development of insurance activity and its supervision, and in particular:
1. Examining and studying applications for the establishment of insurance and reinsurance companies, and takaful insurance and takaful reinsurance companies.
2. Granting licences to carry on insurance activities of all kinds to those who satisfy the conditions for carrying them on.
3. Regulating the ancillary services of the insurance sector.
4. Applying the international standards for the supervision of the insurance sector.
5. Approving the financial and administrative structure of the Unit.
6. Undertaking supervision and inspection procedures over companies operating in the insurance sector of all kinds.
7. Approving the rules, regulations and procedures governing the granting and revocation of licences to carry on insurance and reinsurance activities and the supporting professions.
8. Ensuring that licensed companies comply with all local and international rules relating to insurance activity.
9. Protecting the rights of policyholders and beneficiaries of insurance activities, and monitoring the financial solvency of companies so as to provide sufficient insurance cover to protect those rights.
10. Working to raise the performance and efficiency of licensed companies and to bind them by the rules of governance and the rules and ethics of professional practice, so as to increase their ability to provide better services to the beneficiaries of insurance and to achieve positive competition among them.
11. Working to provide qualified human resources to carry on insurance activities, including establishing an institute for that purpose; participation and cooperation in this regard with the competent entities may take place in accordance with the provisions of the legislation in force.
12. Approving programmes and plans for developing the insurance sector in all fields, working to develop insurance awareness, and preparing and circulating studies and research relating to insurance activity.
13. Determining the funds that shall be retained and the bases and controls for their investment.
14. Strengthening links of cooperation and integration with similar entities regulating and supervising the insurance sector at the Arab and international levels.
15. Determining the risks for which insurance shall be compulsory.
16. Establishing an insurance database that organises the insurance operations carried out by licensed companies.
17. Suspending or revoking the licence of any licensed company whose liquidity or solvency is exposed to risk, in accordance with the procedures specified in these Regulations.
18. Approving the liquidation of companies licensed under the Law.
19. Laying down rules for combating money laundering and terrorist financing in insurance activities in cooperation with the competent entities.
20. Any other tasks relating to the regulation of the insurance sector determined by the Unit.
Special rules and regulations
Article 28
The Unit shall lay down special rules and systems, including:
1. Rules for combating money laundering and terrorist financing pursuant to Law No. (106) of 2013 on Combating Money Laundering and Terrorist Financing and its Executive Regulations, and their amendments.
2. Corporate Governance Rules.
3. Codes of honour by which the rules of conduct and work ethics at the Unit are determined.
4. Rules on Compliance with Professional Ethics, Competence and Integrity for licensed persons.
5. Any other rules or systems determined by the Unit.
Article 29
The Head of the Unit shall manage its business, shall be the legal representative of the Unit and shall be responsible for implementing and following up the resolutions issued by the Committee. He shall, in particular, have the following powers:
1. Implementing the policies, plans and programmes approved by the Committee.
2. Proposing the administrative and financial structure of the Unit and supervising it in a manner that ensures the proper conduct of the Unit’s business.
3. Preparing programmes and plans for developing the insurance sector and raising the level of its services, for submission to the Committee.
4. Preparing draft laws, regulations, systems, instructions and resolutions issued under the provisions of the Law and these Regulations and relating to insurance activities, and submitting them to the Committee.
5. Issuing the necessary resolutions that he is authorised to issue under the provisions of the Law and these Regulations.
6. Any other competences entrusted to him by the Committee.
Article 30
The Committee shall lay down the administrative and financial structure for the employees appointed to work at the Unit, including the rules for appointment, promotions, salaries and in-kind and cash remuneration, by way of exception from the Civil Service Law and its System. The latter Law and its System shall apply to any matter for which no special provision is made in this regard.
Article 31
By way of exception from the provisions of Article Two of Amiri Decree No. (12) of 1960 and the provisions of Article No. (10) of Decree-Law No. (38) of 1980, referred to above, the Unit shall have a legal department reporting to the Head of the Unit, which shall undertake all cases and appear before all courts and arbitral tribunals, or give legal opinions and conduct investigations. All litigation papers in actions or appeals, and the judgments issued, shall be delivered to it. The Higher Committee shall lay down the resolutions necessary to organise the legal department.
Revenues of the Unit
Article 32
The revenues of the Unit shall consist of the following resources:
1. Any amounts allocated by the Government to the Unit.
2. The fees collected by the Unit for the services it provides and the company licences it issues.
3. The financial penalties imposed in accordance with the provisions of the Law and these Regulations.
4. 10% of the savings of the preceding financial year, provided that the remaining savings derived from fees and services are transferred to the State Public Treasury.
Budget of the Unit
Article 33
The Unit shall have an independent budget issued by law and prepared in accordance with the rules and provisions of Decree-Law No. (31) of 1978 on the Rules for Preparing Public Budgets, Controlling their Implementation and the Final Account. The financial year of the Unit shall begin on the first of April and end on the thirty-first of March of each year, except for the first year, which shall begin on the date the provisions of the Law come into force and end at the end of March of the following year.
Article 34
1. The funds of the Unit shall be deemed public funds.
2. The Unit shall enjoy the exemptions and facilities enjoyed by ministries and government departments.
3. The Unit shall keep appropriate books of account and records of its revenues, expenses, assets and liabilities and of all transactions of the Unit. The Unit shall have one or more independent auditors, and these Regulations shall determine the conditions and controls that they shall satisfy.
Auditors of the Unit
Article 35
The auditing of the Unit’s accounts shall be entrusted to one or more auditors, whom the Higher Committee shall select and whose fees it shall determine on the proposal of the Audit Committee.
Article 36
An auditor may not carry out review and audit work at the Unit unless he is registered in the Register of Auditors at the Unit.
Article 37
The auditor shall have the right to access the documents, information and data necessary for performing his duties, without prejudice to the provisions relating to the confidentiality of information at the Unit.
Article 38
The Unit shall submit to the Competent Minister an annual report, to be referred to the Council of Ministers within (90) ninety days from the end of each financial year, on its activities, work and achievements in developing and growing the market during the past year, provided that it includes the accounts of the Unit and the auditor’s report.
Commitment to impartiality, disclosure and confidentiality
Article 39
No person invited to a meeting within the competence of the Unit who has a direct or indirect interest in the matter put forward for discussion may participate in its discussion, express an opinion on it or vote on it. He shall disclose such interest at the beginning of the meeting and leave the meeting before discussion of the matter begins.
Article 40
Any person working in or with the committees of the Unit, whether for consideration or without consideration, shall maintain the confidentiality of the information that has come to his knowledge by virtue of his position, and shall safeguard the documents in his possession so that no one other than the competent persons at the Unit has access to them, unless the Law or any other law so requires, or a judgment or order is issued by a judicial authority obliging him to disclose or provide any information or documents he obtained by virtue of his position.
Whoever is required to disclose confidential documents or information shall notify the Unit of the information or documents that will be disclosed and of the entity to which they will be disclosed, before disclosing the documents or information.
Article 41
All data and information relating to the work of the Unit shall be confidential and may not be disclosed except with the approval of the Unit or pursuant to a court order.
The data and information of licensed persons and of the persons dealing with them shall also enjoy the protection established for personal and confidential data, and may not be disclosed except in the cases that the Law or these Regulations may permit or pursuant to a court order.
Oversight and inspection
Article 42
All licensed persons shall be subject to the supervisory rules, systems and instructions established by the Unit. All persons registered in its registers shall also be subject to its supervision.
Article 43
The Unit may inspect the licensed persons subject to its supervision to ensure their compliance with the provisions of the Law and with the regulations, systems and resolutions issued by the Unit, and for that purpose it may carry out periodic inspections upon prior notice.
The Unit may also carry out surprise inspections without prior notice to achieve its supervisory purposes or to investigate the complaints or violations it receives.
Judicial enforcement powers
Article 44
The Higher Committee shall issue a resolution granting the capacity of judicial police officers to employees of the Unit, upon the nomination of the Head of the Unit, to establish the crimes committed in violation of the provisions of the Law, these Regulations and the resolutions issued in implementation thereof.
Article 45
Those who are vested with the capacity of judicial police officers shall, in performing their work, have the following powers:
1. Entering the business premises of persons working in the field of insurance business and activities, or any other entity where such persons are found.
2. Inspecting the entities subject to the Law and these Regulations to ensure their compliance with the provisions of the Law and with the regulations, systems and resolutions issued in implementation thereof.
3. Examining records, books, documents and data, or papers, tapes, computer systems or other media for storing and processing data, at the business premises of persons working in the field of insurance business and activities or at any other entity where they are found and which are in its possession or under its control.
4. The right to obtain information and justifications upon request.
They may summon witnesses and hear their statements, or request any person with technical expertise to give an opinion on any matter relating to the performance of their work, and record the same in minutes.
Article 46
The officials of the entities referred to in Article (45) of these Regulations shall provide the judicial police officers with the data and documents they request for that purpose. Such officers may seize or secure such documents and refer them to the competent authorities for disposal if necessary.
Article 47
Judicial police officers shall draw up minutes of the acts they have carried out, establish the facts where a violation exists, include a summary thereof in the minutes and submit them to the Head of the Unit. They shall also prepare periodic written reports on their work.
Article 48
No person may refuse to provide any information, data or documents requested by the judicial police officers on the ground that they are protected or confidential. Nor shall a person’s fear of being exposed to any penalty be deemed an acceptable excuse for refusing to allow the examination of any information or documents, to disclose them or to answer questions, or for not allowing entry to the places requested by the judicial police officers.
Article 49
No person may engage in, incite or assist conduct that results in preventing the judicial police officers from exercising their powers, whether by destroying documents, refraining from providing information or documents, giving false or misleading information, or refraining from providing any assistance that the person is able to provide.
Chapter Two: Complaints Committee
Article 50
The Complaints Committee shall be formed by a resolution of the Head of the Unit, chaired by the Deputy Head of the Unit, with the membership of each of the following:
(a) A representative of the Supervision and Oversight Department.
(b) A representative of the Legal Affairs Department.
(c) Two members from outside the Unit who are specialists in the legal, insurance or financial field.
Provided that the two members referred to in Clause (a, b) are holders of positions in the supervisory job group at the Unit.
The resolution shall determine the remuneration for the work of the Committee, the term of its membership and its rules of procedure.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Article 51
The Committees and Councils Affairs Department at the Unit shall undertake the tasks of secretariat and coordination for convening the meetings of this Committee, preparing its agenda, recording the minutes of its sessions, following up the implementation of its resolutions and recommendations, cooperating and coordinating with all departments and committees of the Unit, and any other tasks assigned to it by the Chairman of the Committee.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Submission of complaints
Article 52
Any interested party may submit a complaint to the Complaints Committee regarding any fault committed by a licensed person in accordance with the Law and these Regulations.
Registration of complaints
Article 53
The complaint shall be entered in the register prepared for that purpose, and all information relating to it shall be made available to the complainant immediately upon its submission through the complaints portal on the Unit’s website.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Consideration of complaints
Article 54
The Complaints Committee shall consider the subject of the complaint after the complaint has been escalated by its submitter through the complaints portal on the Unit’s website.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Article 55
The deliberations of the Complaints Committee shall be confidential and its resolutions shall be issued by majority; in the event of a tie, the side on which the Chairman voted shall prevail. All members of this Committee shall maintain the confidentiality of the information and documents that have come to their knowledge by virtue of their work, and shall not allow anyone other than the competent persons at the Unit to have access to them.
Disclosure of information or documents in the cases where the Law, or any other law, requires their disclosure shall not be deemed a breach of the duty of confidentiality.
Article 56
Any member of the Complaints Committee is prohibited, while performing his duties, from having any interest, whether direct or indirect, with any entity subject to the provisions of the Law and these Regulations.
Preparation of a report on the complaint
Article 57
The Complaints Committee shall submit a report of its recommendations to the Head of the Unit for the issuance of a decision on the complaint or on closing (filing) it.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Chapter Three: Grievances Committee
Article 58
A Grievances Committee shall be established for grievances against the decisions of the Unit, attached to the Competent Minister and consisting of five members who are experts specialised in the insurance, legal and financial fields, to be named by a resolution of the Competent Minister for a term of three years, non-renewable.
The resolution of the Competent Minister shall determine the remuneration of the members of the Committee, the Committee’s rules of procedure, the procedures for submitting, studying and deciding on grievances, and the manner of notifying the grievant and the Unit of its decisions.
Decision on grievances
Article 59
The Grievances Committee shall study the grievances submitted to it and decide on them, and shall issue a binding decision on the grievance within (7) seven working days from the submission of the grievance to it. The Unit shall be notified of the decision for its implementation.
Article 60
Any concerned party may file a grievance before the Grievances Committee against the decisions of the Unit within (30) thirty working days from the date of their publication or of the notification of the concerned parties thereof, whichever is earlier.
Article 61
When submitting a grievance against decisions issued by the Unit in accordance with the provisions of the Law or these Regulations or the resolutions issued in implementation thereof, the grievant shall deposit in the Unit’s treasury the fee prescribed for that purpose as set out in Article (19) of these Regulations, and the submitter shall be given a dated receipt therefor.
Article 62
The Unit shall provide the Grievances Committee with the documents and information relating to the grievance submitted to the Committee immediately upon the Committee’s request.
Chapter Four: Sharia Supervisory Advisory Committee
Article 63
A Sharia Supervisory Advisory Committee reporting to the Higher Committee shall be established by a resolution of the Higher Committee. This Committee shall be the reference for all matters relating to the decisions of the Unit in the field of takaful insurance and activities compliant with the provisions of Islamic Sharia.
Article 64
The Sharia Supervisory Advisory Committee shall consist of at least five non-full-time members from among experts specialised in the jurisprudence of Islamic financial transactions, insurance, law and economics, provided that the majority of the members of this Committee are specialists in Sharia. The Higher Committee shall issue a resolution naming them for a term of two years renewable once.
Article 65
The Sharia Supervisory Advisory Committee may seek the assistance of experts from outside the Unit after the approval of the Unit.
Article 66
The Higher Committee shall lay down the rules of procedure of the Sharia Supervisory Advisory Committee and determine its remuneration.
Article 67
The Sharia Supervisory Advisory Committee shall be competent in the following matters:
1. Giving the Sharia opinion on matters relating to the work of the Unit in the fields of activities compliant with the provisions of Islamic Sharia.
2. Giving the Sharia opinion upon the introduction of new takaful insurance policies offered for the first time in the field of takaful insurance, whether by the Unit or after their approval by the Unit.
3. Giving an opinion on matters referred to it by the Higher Committee.
4. Giving the Sharia opinion on complaints filed by customers against persons subject to the supervision of the Unit concerning non-compliance with the provisions of Islamic Sharia.
5. Giving an opinion on the application of the Sharia standards, resolutions and systems established to regulate the work of persons subject to the supervision of the Unit who operate in accordance with the provisions of Islamic Sharia.
6. Proposing regulations and systems on the Sharia supervision system of persons subject to the supervision of the Unit who operate in accordance with the provisions of Islamic Sharia.
7. Proposing the regulations, systems and policies governing the profession of internal and external Sharia review and audit for persons subject to the supervision of the Unit who operate in accordance with the provisions of Islamic Sharia.
8. Proposing the supervisory rules and controls governing insurance activity compliant with the provisions of Islamic Sharia in all instructions and resolutions issued by the Unit regarding the regulation and supervision of the work of persons who operate in accordance with the provisions of Islamic Sharia.
9. Giving the reference opinion on the activities of persons subject to the supervision of the Unit who operate in accordance with the provisions of Islamic Sharia.
10. Proposing plans and methodologies that would develop insurance activity compliant with the provisions of Islamic Sharia in the State of Kuwait.
11. Preparing studies that contribute to developing insurance activity compliant with the provisions of Islamic Sharia in the State of Kuwait.
12. Proposing model contracts approved by the Unit for operating in accordance with the provisions of Islamic Sharia.
13. Deciding on disputes that may arise between members of the Sharia Supervisory Boards of licensed persons, or where those Boards do not reach a specific Sharia opinion on a matter submitted to them.
14. Giving the Sharia opinion on matters referred to it by the courts or arbitration centres regarding Islamic banking and financial business cases.
15. Any other tasks referred to it by the Unit.
Part Three: Licensing and Registration of Insurance Companies, Reinsurance Companies and Insurance Pools
Chapter One: Licensing to Carry On Insurance and Reinsurance Activities
Article 68
No person may carry on any insurance or reinsurance activity in the State of Kuwait without obtaining a licence from the Unit to carry on such activity.
A single juristic person may obtain a licence to practise one or more insurance or reinsurance activities.
A register of companies licensed to carry on insurance business shall be established at the Unit.
Licensing conditions
Article 69
Without prejudice to the provisions of the Companies Law referred to above, insurance and reinsurance companies shall take the form of a shareholding company, and the issued capital shall not be less than the following:
1. Five million Kuwaiti dinars for a company carrying on life insurance and capital formation operations activities and their classes.
2. Five million Kuwaiti dinars for a company carrying on general and property insurance activities and their classes and/or liability insurance activities and their classes.
3. Ten million Kuwaiti dinars for a company that combines in its business the types of activities stipulated in Clauses (1) and (2) of this Article.
4. Fifteen million Kuwaiti dinars for a company carrying on reinsurance business for any of the insurance activities.
In all cases, the issued capital shall be paid in full upon incorporation. The minimum issued capital may be increased by a resolution of the Unit.
Licence application
Article 70
The person wishing to carry on any insurance or reinsurance activity, or his legal representative, or the founders in the case of a company under incorporation, shall submit the licence application on the form prepared for this purpose, and the application shall be submitted accompanied by the following information and documents, as the case may be:
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 juristic person.
2. Specification of the activities which the applicant wishes to carry on.
3. Declarations signed by the founders of the company that no final judgments declaring them bankrupt, convicting them of a crime involving dishonour or breach of trust, or sentencing them to a custodial penalty for any of the crimes provided for in the Law or any other law, have been issued against them within the five years preceding the submission of the licence application, unless they have been rehabilitated.
4. A statement of the amount of the issued and paid-up capital of the company that will carry on the activity subject of the application.
5. A copy of the Company Contract of the company that will carry on the activity, and any amendments made thereto.
6. An economic feasibility study and a five-year business plan, which shall include, at a minimum, the following:
(d) The classes of insurance in which the company intends to carry on the activity, and the risks associated therewith.
(e) The ability to cede or accept reinsurance treaties for the classes to be reinsured.
(f) The product marketing plan.
(g) The expected expenses of commencing the activity and the financial resources required for funding.
(h) The expected growth rates of the activity, taking into account the solvency margin requirements.
(i) The expected number of employees and the plan for employing and training Kuwaiti nationals.
(j) The annual costs based on the expected growth rates of the activity.
(k) Projected financial statements linked to the growth forecasts.
(l) A statement of the technical bases of the insurance operations, and a certificate from an actuary stating that the bases, benefits and restrictions of the insurance operations are sound and practicable.
(m) The plan for opening the company’s branches.
7. A list of the names proposed to hold executive positions, with a detailed statement of the qualifications and experience of each of them, attaching proof of such qualifications and experience.
8. A declaration by the licence applicant that the information contained in the application and the documents attached thereto are true and complete, in addition to any other declaration required by the Unit.
9. The receipt for payment of the application review fee prescribed in Article (19) of these Regulations.
10. Any other information or documents required by the Unit.
Application for a licence to open a branch of an insurance company incorporated in Kuwait
Article 71
An insurance company may, after obtaining the approval of the Unit, open one or more branches inside or outside Kuwait, and a branch may not carry on its business until the conditions set out in the Law and these Regulations have been fulfilled. The company shall be responsible for the business of all its branches and for providing the Unit with all data and information relating thereto.
Article 72
Where an insurance company incorporated in Kuwait wishes to open a branch inside or outside Kuwait, it shall submit an application to that effect to the Unit on the form prepared for this purpose. The following documents shall be attached to the application of an insurance company incorporated in Kuwait to open a branch:
1. The resolution of the company’s General Meeting to open the branch.
2. The economic feasibility study and the business plan for opening the branch.
3. The organisational structure of the branch and a list of the name of the branch manager and its key employees, provided that it includes the names of the persons authorised to sign on behalf of the branch.
4. An undertaking by the company to provide specialised insurance training programmes to the nationals employed by it.
5. Any other documents specified by the Unit.
The company shall provide the Unit with any amendment, change, addition or removal that occurs in respect of the attachments to the application.
Decision on the licence application
Article 73
The Unit shall review the licence application, and it may exempt the licence applicant from some of the requirements or impose additional requirements, according to the type of activity subject of the licence.
The Unit may notify the licence 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 subject of the licence application.
2. Sufficient resources to carry on the activity subject of the licence application.
3. Sufficient managerial expertise, technical resources, systems, and operational policies and procedures to carry on the activity subject of the licence application.
4. That the members of the Board of Directors and the members of the executive management possess the necessary qualifications, skills and experience approved by the Unit.
Where 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 74
The Unit shall decide on the application for obtaining the licence within (30) thirty days from the date of receipt of the application complete with all the information and documents, and the Unit may take any of the following decisions on the licence application:
1. Licensing the carrying on of the activity requested in the licence application.
2. Issuing an initial approval conditional upon the completion of certain procedures or the fulfilment of specified criteria within the period specified by the Unit for the licence applicant, and the Unit may extend this period whenever it deems it necessary.
3. Rejecting the licence application.
Article 75
The Unit shall notify the applicant of its decision to approve or reject the licence, provided that the decision is reasoned in the latter case.
A person whose application is rejected may, after paying the fee prescribed in Article (19) of these Regulations, file a grievance within the time limits specified in these Regulations.
Article 76
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 as follows:
1. The licence renewal application shall be submitted three months before the end of the licence term, on the licence renewal application form prepared for this purpose, provided that all the documents and information set out in this form are attached to the application, together with payment of the fee prescribed in Article (19) of these Regulations.
2. The Unit may notify the applicant – at any time after its receipt of the licence renewal application – of the need to submit any additional information or documents, and where the applicant fails to submit the 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.
3. The Unit shall decide on the licence renewal application within (30) thirty days from the date of its receipt of such application complete with all the information and documents.
4. The Unit may refuse to renew the licence for any of the licensed activities if the company does not fulfil the essential conditions provided for in these Regulations.
Chapter Two: Suspension or Revocation of the Licence
Suspension of the licence
Article 77
The Unit may suspend the licence of the company if it is established to the Unit that the company has committed any of the following:
1. If the licensed company does not maintain the funds provided for in Article (35) of the Law.
2. If the company does not invest its funds in the manner specified by these Regulations.
3. If the licensed company refrains from executing a final court judgment relating to its activities provided for in the Law and these Regulations.
4. If the licensed company violates the provisions of the Law and the regulations and resolutions implementing it, or the aforementioned Companies Law, or any other law, or its articles of association.
5. If the licensed companies delay in settling their obligations specified in these Regulations.
6. If the licensed company breaches its obligations provided for in Articles (30) and (32) of the Law.
7. If it becomes apparent to the Unit that the rights of policyholders are at risk of being lost.
8. If the company loses any of the conditions required for carrying on insurance activity in accordance with the provisions of the Law and these Regulations.
Article 78
The Unit shall notify the company, through a process server or by electronic service – in accordance with the information recorded in the company’s register with the Unit – to rectify the violations attributed to it, and the Unit shall, within a period not exceeding (30) days from the date of the notification, issue a reasoned decision suspending the licence and specifying the period of suspension, and the suspension decision shall be published in the Official Gazette.
In all cases, the company shall rectify the violations attributed to it, and the company may file a written grievance against the suspension decision in accordance with the procedures specified in the Law and these Regulations.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Article 79
Where the licence of the company is suspended, it shall remedy the grounds for the suspension and submit evidence thereof to the Unit, taking into account the following:
1. A declaration and undertaking by the Chairman of the Board of Directors, or whomever he designates, to comply with the Law and these Regulations and that the company will not repeat the violation, and any other undertakings specified by the Unit.
2. Submission of any other documents or information required by the Unit to ascertain that the company fulfils the conditions of the licence to carry on the activity.
Article 80
The Unit shall decide on the resumption of the activity of the suspended company within (30) thirty days from the date of fulfilment of the requirements of Article (79) of these Regulations.
The Unit shall issue a decision for the company to resume the activity subject of the suspension, where it approves the cancellation of the suspension decision.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Revocation of the licence
Article 81
The Higher Committee may issue a reasoned decision revoking the licence of the company in the following cases:
1. If it becomes apparent that the entry in the register was made in violation of the provisions of the Law and these Regulations.
2. If it is established that the company refrains from executing final judgments.
3. If a decision is issued approving the transfer of the policies issued by the company to another company in respect of all the operations it carried on in Kuwait, in accordance with the provisions of the Law and these Regulations.
4. If the company ceases to carry on its activity in Kuwait pursuant to the provisions of Article (51) of the Law.
5. If the company is adjudged bankrupt.
6. If the activity of the company is suspended more than once within two years.
7. If the company does not rectify the violations attributed to it in accordance with Article (53) of the Law.
Article 82
The Unit shall notify the company, through a process server or by electronic service – in accordance with the information recorded in the Unit’s register – to submit its justifications in writing, and if the company does not submit such justifications within (30) thirty days from the date of the notification, the Unit shall issue a reasoned decision revoking the licence wholly or partially, as the case may be. The effect of a partial revocation of the licence shall extend only to the class or classes of insurance specified in the revocation decision, and the revocation decision shall be published in the Official Gazette.
The company may file a written grievance against the revocation decision in accordance with the procedures specified under the Law and these Regulations.
Article 83
The suspension or revocation of the licence shall not prejudice the right of the Unit to conduct any investigation or take any action against the company or any other person in respect of any violation that may have occurred before the date of the Unit’s decision to suspend or revoke the licence or to restrict the activity.
Article 84
The Unit may, before taking the decision to suspend or revoke the licence, appoint a temporary monitor to follow up the progress of the company in its activity. It may also, if it considers that doing so protects policyholders, request the competent court to issue an order prohibiting the taking of any proceedings against the company concerned and staying all actions brought against it, and such order shall remain in force for one year.
Chapter Three: Ceasing Activity in One or More Classes of Insurance
Article 85
If a company decides to cease carrying on its activity in one or more classes of insurance and to release its funds relating to the class or classes it requests to cease, it shall follow the provisions of Chapter One of Part Four, and shall submit to the Unit evidence that it has fulfilled all its obligations under all the policies it issued in the class or classes in respect of which it decided to cease its operations, or that it has transferred its policies to another company in the manner prescribed in the aforementioned Chapter.
The Unit shall issue a decision ceasing the carrying on of the activity of the class or classes if no one submits an objection thereto within the period referred to in Article (48) of the Law.
Chapter Four: Notification Requirements
Article 86
The company shall:
1. Notify the Unit within (15) fifteen days at most from the date of making any change to the address of the head office, or to the address for service at which correspondence and notifications are delivered, attaching the automated (PACI) number.
2. Notify the Unit within (7) seven days from the date of incorporating, acquiring ownership of, selling or dissolving a subsidiary, or of any changes occurring to the information provided to the Unit regarding the branch offices through which the company carries on its activity.
3. Notify the Unit within (7) seven days of the appointment, removal or resignation of the auditor.
4. Notify the Unit of the agenda, date and venue of the meeting of the ordinary and extraordinary General Meeting – attaching all the documents relating to the items included in the agenda – at least (15) fifteen days before the meeting is held.
5. Provide 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 evidence of the entry in the Commercial Register of the resolutions of the extraordinary General Meeting, within a maximum period of (15) fifteen days from the date the meeting is held.
Chapter Five: Insurance Pools
Article 87
Insurance and reinsurance companies may establish among themselves an insurance pool for the purpose of managing a specific class of insurance or a specific operation in itself for joint account, in accordance with the articles of association of each pool.
Article 88
The founding members of the pool shall draw up its articles of association. The establishment of the pool and the approval of its articles of association shall be by a decision of the Higher Committee, and any amendments to the articles of association and the justifications for such amendment shall be annotated in the Register of Insurance Pools.
Article 89
A special register shall be established at the Unit, called the “Register of Insurance Pools”, in which all pools established in accordance with the provisions of the Law and these Regulations shall be recorded.
Article 90
The financial year of the pool shall begin with the beginning of the financial year of insurance companies and shall end with its end.
Article 91
The pool shall submit to the Unit, within the three months following the end of the financial year at most, a report on the results of its business on the form specified by the articles of association of the pool, in addition to any other data required by the Unit, signed by the person responsible for managing the pool.
Article 92
The pool shall submit to the Unit, within the three months following the end of the financial year at most, an annual report issued by its auditor certifying that both the joint account of the pool and the technical provisions have been prepared properly and give a true representation of the financial position of the pool.
Part Four: Portfolio Transfer and Merger
Chapter One: Portfolio Transfer
Article 93
Insurance companies may – after obtaining the approval of the Unit – transfer all their policies, with the rights and obligations they include, in respect of all or some of the classes of insurance they carry on in Kuwait, to one or more other companies subject to the provisions of the Law and these Regulations.
Article 94
The application shall be published in the Official Gazette and in two local daily newspapers, one of which is published in Arabic, in addition to any electronic means of the Unit, and the application shall include an invitation to policyholders and other interested parties to submit their objections to the transfer to the Unit within a period not exceeding (30) thirty days from the date of publication in the Official Gazette.
Article 95
Insurance companies wishing to transfer their policies shall submit an application on the form prepared for this purpose, and the application shall be submitted accompanied by the following information and documents, as the case may be:
1. The name and address of the applicant for the portfolio transfer – including the automated (PACI) number – and the commercial registration number of the company.
2. The consent of the company accepting the transfer of the policies to it.
3. A statement of the existing policies and of the policies to be transferred.
4. A statement of the amount of the issued and paid-up capital of both companies.
5. A copy of the Company Contract of the company requesting the portfolio transfer, and any amendments made thereto.
6. An economic feasibility study and a three-year business plan for the company accepting the transfer of the policies to it, which shall include, at a minimum, the following:
(a) The risks associated with the portfolio transfer.
(b) The insurance products marketing plan.
(c) The expected expenses of modifying the activity and the financial resources required for funding.
(d) The expected growth rates after the portfolio transfer, taking into account the solvency margin requirements.
(e) The annual costs based on the expected growth rates after the portfolio transfer.
(f) Projected financial statements linked to the growth forecasts.
(g) A statement of the technical bases of the insurance operations, and a certificate from an actuary stating that the bases, benefits and restrictions of the insurance operations are sound and practicable.
7. A declaration submitted by the transfer applicant that the information contained in the application and the documents attached thereto are true and complete, in addition to any other declaration required by the Unit.
8. The receipt for payment of the transfer application review fee prescribed in Article (19) of these Regulations.
9. A copy of the issues in which the notice of the application was published in the Official Gazette and in two daily newspapers.
10. Any other information or documents required by the Unit.
Decision on the transfer application
Article 96
The Unit shall review the application, and it may exempt the company requesting the transfer from some of the requirements or impose additional requirements, as the case may be.
The Unit may notify both companies of the need to submit any additional information or documents to ascertain that each of them has the following:
1. The capability and competence required after the portfolio transfer.
2. Sufficient resources for the portfolio transfer.
3. Sufficient managerial expertise, technical resources, systems, and operational policies and procedures for the portfolio transfer.
4. The ability to pay all the amounts relating to the premiums subject of the transfer and any commissions collected in respect thereof, in addition to the ability to pay the amounts due to third parties before the transfer (if any).
5. Evidence that the company accepting the transfer of the policies to it has financial solvency commensurate with the new portfolio.
6. The timetable for the portfolio transfer.
Where the applicant fails to submit the required documents and information within the period specified for him by the Unit in the notification, without an acceptable excuse, the application shall be deemed not to have been submitted.
Article 97
The Unit shall decide on the portfolio transfer application within (30) thirty days from the date of receipt of the application complete with all the information and documents, and the Unit may take any of the following decisions on the portfolio transfer application:
1. Issuing an initial approval conditional upon the completion of the portfolio transfer procedures or the fulfilment of specified criteria within the period specified by the Unit for the company requesting the portfolio transfer, and the Unit may extend this period whenever it deems it necessary.
2. In the event of an objection to the transfer, the transfer shall be stayed until the objection is settled amicably or judicially, and the Unit may issue its decision approving the transfer on condition that the transferring company provides a bank guarantee equal to the value of its obligations towards the objector; and in the event of a judgment in favour of the objector, what is due to him shall be satisfied by deduction from the amount of the guarantee, and the remainder, if any, shall be returned to the company.
3. Rejecting the transfer application.
Article 98
The Unit shall notify the company requesting the portfolio transfer of its decision on such application, and in the event of rejection the decision shall be reasoned.
The company may, after paying the fee prescribed in Article (19) of these Regulations, file a grievance within the specified time limits and in accordance with the procedures specified in Article (20) of the Law.
Chapter Two: Merger
Article 99
Without prejudice to the provisions of the aforementioned Companies Law and Capital Markets Authority Law, Law No. (116) of 2013 on the Promotion of Foreign Direct Investment and Law No. (72) of 2020 on the Protection of Competition, the provisions set out in Chapter One of this Part shall apply in the event of a merger between companies subject to the provisions of the Law and these Regulations.
Each of the companies wishing to merge shall submit a report approved by the auditor and by one of the actuaries registered in the Unit’s register stating that the merger does not prejudice the rights of policyholders and beneficiaries and the rights of third parties in general.
Article 100
The merger application shall be submitted to the Unit on the form prepared for this purpose, accompanied by the following:
1. The draft merger contract.
2. The preliminary valuation of the assets and liabilities of the company.
3. The Company Contract and all amendments or entries made thereto up to the date of submission of the application.
4. The auditor’s report giving his opinion on the data on the basis of which the share to be obtained by the merged company in the absorbing company, or in the company incorporated as a result of the merger, was calculated.
5. The report of one of the actuaries registered in the Unit’s register stating that the merger does not prejudice the rights of policyholders and beneficiaries and the rights of third parties in general.
6. The company’s licence.
7. The approval of the Competition Protection Agency.
8. The approval of the Capital Markets Authority on the draft merger contract, in the case of companies subject to its oversight.
9. An undertaking by the absorbing company or the new company to succeed the merged company in all its rights and obligations, in the case of a merger by absorption or by consolidation; and in the case of a merger by division and absorption, the undertaking shall be joint and several among the absorbing companies in respect of the obligations of the merged company.
10. Any other documents required by the Unit.
Article 101
The Unit shall examine the application, and if it considers that other data should be added to the draft merger contract, it shall notify the companies party to the merger to add them and to resubmit it to the Unit for the issuance of the decision approving or rejecting the merger.
Article 102
In the event of approval of the merger, the Unit shall notify the companies party to the merger to convene the extraordinary General Meeting to complete the merger procedures, within a period not exceeding (30) thirty days from the date of notification of the approval; and in the event of rejection, the companies party to the merger shall be notified of the grounds for rejection, and a grievance may be filed in accordance with the procedures specified under Article (20) of the Law.
Article 103
Where the extraordinary General Meeting approves the merger, the publication procedures shall be taken, and the resolution shall not take effect until (30) thirty days have elapsed from the date of publication.
The company shall notify the Unit of any objections to the merger submitted to it by creditors.
Chapter Three: Acquisition
Article 104
The prior approval of the Unit shall be obtained for any person wishing to make an acquisition offer or to enter into arrangements or agreements leading to effective control over an entity subject to the oversight of the Unit, before such arrangements or agreements are implemented, in accordance with the following procedures:
1. The application shall be submitted to the Unit – after payment of the fee prescribed therefor set out in Article (19) of these Regulations – at least (60) sixty days before entering into the arrangements or agreements that lead to effective control over an entity subject to the oversight of the Unit (the period being calculated from the date of completion of all the required data and information), in accordance with the following data:
• The name and address of the applicant – including the automated (PACI) number – and the identity number if a natural person, or the commercial registration number if a juristic person.
• Specification of the activities which the applicant wishes to carry on.
• The approval of the Competition Protection Agency.
• The approval of the Capital Markets Authority, in the case of companies subject to its oversight.
• Declarations signed by the applicants that no final judgments declaring them bankrupt, convicting them of a crime involving dishonour or breach of trust, or sentencing them to a custodial penalty for any of the crimes provided for in the Law or any other law, have been issued against them within the five years preceding the submission of the licence application, unless they have been rehabilitated.
• A statement of the amount of the acquisition value and the percentage of effective control over the company subject of the application.
• A copy of the Company Contract of the company that will carry out the acquisition, and any amendments made thereto.
• An economic feasibility study and a five-year business plan, which shall include, at a minimum, the following:
1. The classes of insurance in which the company intends to carry on the activity, and the risks associated therewith.
2. The ability to cede or accept reinsurance treaties for the classes to be reinsured.
3. The product marketing plan.
4. The expected expenses of commencing the activity and the financial resources required for funding.
5. The expected growth rates of the activity, taking into account the solvency margin requirements.
6. The expected number of employees and the plan for employing and training Kuwaiti nationals.
7. The annual costs based on the expected growth rates of the activity.
8. Projected financial statements linked to the growth forecasts.
9. A statement of the technical bases of the insurance operations, and a certificate from an actuary stating that the bases, benefits and restrictions of the insurance operations are sound and practicable.
10. The plan for opening the company’s branches.
• A list of the names proposed to hold executive positions, with a detailed statement of the qualifications and experience of each of them, attaching proof of such qualifications and experience.
• A declaration by the licence applicant that the information contained in the application and the documents attached thereto are true and complete, in addition to any other declaration required by the Unit.
• The receipt for payment of the application review fee prescribed in Article (19) of these Regulations.
• Any other information or documents required by the Unit.
2. The Unit shall decide on the application within a maximum period of (60) sixty days from the date of its submission complete with any information or documents required by the Unit.
3. The Unit shall grant its approval of the application after ascertaining that any effective control over the entity subject to its oversight, or the ownership of its shares or capital interests, will not impede the supervision and oversight of the entity or lead to its non-compliance with the Law and these Regulations; and where the Unit rejects the application, the rejection decision shall be reasoned.
4. Interested parties may, after paying the fee prescribed in Article (19) of these Regulations, file a grievance within the specified time limits and in accordance with the procedures specified in Article (20) of the Law.
Article 105
The person making an acquisition offer shall comply with the provisions of Law No. (72) of 2020 on the Protection of Competition if the acquisition is likely to lead to control, or to an increase in existing control, over the insurance market.
Article 106
Without prejudice to the provisions of the Law and these Regulations, the acquisition provisions set out in Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and the Regulation of Securities Activity, and its amendments, shall apply to acquisitions that involve an offer, attempt or request to acquire the shares of a listed insurance company, or of an unlisted insurance company in the case of a reverse acquisition.
Part Five: Takaful Insurance and Reinsurance Companies
Chapter One: Types of Takaful Insurance
Article 107
Takaful insurance companies established in accordance with the provisions of the Law and these Regulations shall, in conducting their business, comply with all the laws and resolutions issued in this regard, in a manner that does not conflict with the principles and provisions of Islamic Sharia, and in accordance with the resolutions issued by the Sharia Supervisory Board of the company.
Article 108
Without prejudice to the provisions set out in this Chapter, the rules, procedures and provisions set out in the Law and these Regulations shall apply to all persons licensed to operate in accordance with the provisions of Islamic Sharia.
Article 109
Takaful insurance shall include the insurance and reinsurance activities referred to in Article (4) of these Regulations, in a manner that does not contravene the provisions of Islamic Sharia.
Article 110
Without prejudice to Article (15) of the Companies Law, licensing persons who operate in accordance with the provisions of Islamic Sharia shall be conditional – in addition to the conditions set out for the licence application for each activity – upon the following:
1- That the company’s memorandum of association and articles of association provide for carrying on the activity in accordance with the provisions of Islamic Sharia, and for the manner of appointing the Sharia Supervisory Board, and its powers and competences.
2- That the company’s internal organisation includes a Sharia supervision and audit system governed by Internal Regulations ensuring the professionalism, competence and effectiveness of performance in accordance with the standards approved by the Unit.
3- That the company’s Sharia supervision system consists of an internal Sharia audit officer and a Sharia Supervisory Board. The duties of the internal Sharia audit function and of the Sharia Supervisory Board may not be combined.
Article 111
A person licensed to operate in accordance with the provisions of Islamic Sharia shall fulfil the following conditions:
1- To comply with the conditions, controls and resolutions of the Sharia Supervisory Board and any Sharia provisions or standards approved by the Unit.
2- To have a code of ethical conduct in accordance with the provisions and principles of Islamic Sharia.
3- That the internal regulations, contracts, agreements and forms it uses, and the products it offers, are compliant with Sharia standards.
Chapter Two: Management of Takaful Insurance Operations
Article 112
Other insurance companies may – after obtaining the approval of the Unit – amend their Company Contract to carry on takaful insurance activity, after fulfilling the conditions provided for in the Law and these Regulations.
Carrying on takaful insurance activity and other insurance may not be combined in any manner whatsoever, nor vice versa, whether directly by creating an internal unit, or indirectly through an insurance agent, an insurance broker or any other means.
Article 113
Takaful insurance companies shall ensure that the outward and inward takaful reinsurance business is compliant with the provisions of Islamic Sharia or the resolutions issued by the Sharia Supervisory Board of the company, in accordance with what the Unit determines based on the recommendations of the Sharia Supervisory Advisory Committee.
Article 114
Risk management operations and investment business relating to contributions shall be carried out by the company on the basis of wakala or mudaraba, or both together.
Chapter Three: Sharia Supervisory Board
Formation of the Sharia Supervisory Board
Article 115
A takaful insurance company and a takaful reinsurance company shall form a board called the “Sharia Supervisory Board”, consisting of at least three members, who shall be appointed by the ordinary General Meeting, in accordance with the provisions of this Chapter.
Nomination mechanism
Article 116
The Board of Directors shall submit to the Unit the names of the candidates for the Sharia Supervisory Board (45) forty-five days before the date on which the General Meeting of the company is convened.
Decision on the nomination
Article 117
The Unit shall issue its decision on the candidates and shall notify the company of the Unit’s approval or objection – provided that the objection is reasoned – (30) thirty days before the date on which the General Meeting of the company is convened. Where the Unit issues a decision objecting to any of the candidates, the company shall nominate a replacement for the candidate objected to (20) twenty days before the date on which the General Meeting of the company is convened, and the Unit shall issue its decision in this regard and notify the company of the Unit’s approval or objection (5) five days before the date on which the General Meeting of the company is convened.
Article 118
The company shall notify the Unit, within the (10) ten days following the convening of the ordinary General Meeting, of the names of those appointed as members of the Sharia Supervisory Board.
Article 119
The members of the Sharia Supervisory Board shall elect from among themselves a chairman and a vice-chairman, and the chairman shall represent the Board before the Board of Directors of the company, the General Meeting and the Unit. The term of membership of the Board shall be three years, renewable.
Conditions of membership of the Sharia Supervisory Board
Article 120
A candidate for membership of the Sharia Supervisory Board shall satisfy the following conditions:
1. He shall have full legal capacity.
2. He shall not have been previously convicted of a felony punishable by a custodial sentence, or of a crime of negligent or fraudulent bankruptcy, or of a crime involving dishonour or breach of trust.
3. He shall be an expert specialised in the jurisprudence of Islamic financial transactions, law or economics, provided that the majority of the composition of the Board shall be specialists in Sharia.
4. He shall not be a shareholder in the company, a member of its Board of Directors or one of its employees.
5. He shall not be a member of more than three Sharia Supervisory Boards in companies licensed in accordance with the provisions of the Law and these Regulations.
6. He shall not be a member of the Sharia Supervisory Advisory Committee at the Unit.
Powers of the Sharia Supervisory Board
Article 121
The Sharia Supervisory Board shall have competence over the following matters:
1. Reviewing the memorandum of association and articles of association of the takaful insurance company and the regulations and policies followed in the company’s work, and ascertaining their conformity with the provisions of Islamic Sharia.
2. Laying down the basic Sharia rules for the company’s business.
3. Reviewing all of the company’s transactions, takaful insurance products, and the contracts and documents used by the company, to ascertain that they are consistent with the provisions of Islamic Sharia, and approving them before they are put into application.
4. Reviewing the takaful insurance transactions and the investment avenues undertaken by the company and stating the extent of their compliance with the provisions of Islamic Sharia.
5. Rejecting any activity undertaken by the company where the activity is not compliant with the provisions of Islamic Sharia.
6. Presenting and proposing possible Sharia solutions to problems in financial transactions that are not consistent with the principles and provisions of Islamic Sharia, and contributing to finding Sharia-compliant alternatives to products that contravene the rules of Sharia.
7. Ensuring the segregation of earnings realised from sources or by means that conflict with the provisions and principles of Islamic Sharia, and their disbursement to charitable purposes after the approval of the Unit.
8. Ensuring the allocation of expenses and profits and the charging of losses in accordance with the provisions of Islamic Sharia and the system approved for that purpose.
9. Ensuring the calculation of zakat in accordance with the provisions and principles of Islamic Sharia in the cases that so require, in accordance with the articles of association of the company.
10. Supervising the compilation of the Board’s fatwas and approving those of them to be published, as a Sharia reference and an official document that shall be adhered to.
11. Recording Sharia violations – if any – in the company’s activities and requesting their correction or cessation, provided that the Board submits its objection in writing to the Chairman of the Board of Directors.
12. Examining the reports of the internal Sharia auditor on the audit of the company’s executed operations and the extent of their compliance with the provisions of Islamic Sharia.
Annual report of the Sharia Supervisory Board
Article 122
The Sharia Supervisory Board shall submit an annual report to the General Meeting of the company setting out the work carried out by the Board, together with its observations on the company’s transactions and the extent of the company’s compliance with the Sharia provisions. The report of the Sharia Supervisory Board shall include the following:
1. A statement of the work of reviewing and developing the takaful insurance and investment structures, the products and the contract forms, and all new documents, procedures and products.
2. All decisions issued by the Sharia Supervisory Board.
3. The policy and procedure manuals for the company’s products and activities prepared by the Sharia Supervisory Board.
The report of the Sharia Supervisory Board shall be read at the ordinary General Meeting at its annual ordinary meeting, and a copy of the report shall be submitted to the Unit among the documents required to be submitted to the Unit before the ordinary General Meeting of the company is convened.
Internal rules of procedure of the Sharia Supervisory Board
Article 123
The company shall, by a resolution of its Board of Directors, establish internal regulations for the work of the Sharia Supervisory Board, setting out how its meetings are held, its quorum is constituted and its decisions are taken, and the mechanism for removing its members.
A copy of the internal regulations shall be sent to the Unit.
Chapter Four: Internal Sharia Auditor
Article 124
Takaful insurance and takaful reinsurance companies shall have an internal Sharia auditor reporting to the Board of Directors or the committees emanating from it – as the case may be – who shall be competent to oversee the commercial and financial transactions of the company in order to ascertain the extent of their conformity with the Sharia standards and the relevant decisions and instructions of the Unit.
Article 125
The appointment of the internal Sharia auditor shall require that the following conditions be satisfied:
1. He shall have full legal capacity.
2. He shall not have been previously convicted of a felony punishable by a custodial sentence, or of a crime of negligent or fraudulent bankruptcy, or of a crime involving dishonour or breach of trust.
3. He shall be a specialist in the jurisprudence of Islamic financial transactions.
4. He shall not be a shareholder in the company or a member of its Board of Directors.
5. He shall not be a member of any Sharia Supervisory Board in companies licensed in accordance with the provisions of the Law and these Regulations.
6. He shall not be a member of the Sharia Supervisory Advisory Committee at the Unit.
7. Any other instructions issued by the Unit.
Article 126
The main responsibilities of the internal Sharia auditor are as follows:
• Ensuring that day-to-day operations are in line with the Sharia standards and the Sharia guidelines laid down by the company’s Sharia Supervisory Board.
• Maintaining continuous and clear communication between the company and the Sharia Supervisory Board, and reporting any problems, violations or enquiries in a timely manner.
• Preparing the relevant documentation for the Sharia audit work on the operations of the takaful insurance company carried out by the Sharia Supervisory Board.
• Verifying the Sharia compliance of implementation by reviewing selected cases of the various day-to-day transactions in the business of the licensed person.
• Ensuring the compliance of the takaful insurance company with the Sharia standards and the relevant decisions and instructions of the Unit, through periodic appointments and field visits to work sites or to the legal persons with which takaful insurance and reinsurance companies deal.
• The auditor shall carry out coordination and follow-up with the Sharia Supervisory Board and shall submit periodic reports to it setting out the results of the periodic review and audit of his work.
Chapter Five: Books, Accounting Records and Final Accounts
Article 127
The Unit shall issue the following instructions concerning the financial and accounting aspects of takaful insurance business:
1. The accounting policy to be followed by the company and the forms required for preparing reports and financial statements, including the form for preparing the balance sheet and final accounts.
2. The bases for organising the books of account and specifying the data they contain.
3. The records that the company is obliged to organise and keep.
4. The data, documents and papers with which the company shall provide the Unit.
5. The accounts relating to the types of insurance.
6. The accounts relating to participants and their rights.
Part Six: Obligations of Companies Licensed to Carry On Insurance Activity
Chapter One: Financial Obligations
Article 128
Licensed insurance companies shall place a deposit with one or more of the banks operating in Kuwait as security for the fulfilment of their insurance obligations, and the minimum value of the deposit shall be as follows, plus (20%) twenty per cent of total direct premiums after excluding the reinsurance share:
1. Five hundred thousand Kuwaiti dinars for insurance companies that carry on life insurance and capital formation operations activities and their classes.
2. Five hundred thousand Kuwaiti dinars for insurance companies that carry on general and property insurance activities and their classes and/or liability insurance activities and their classes.
3. One million Kuwaiti dinars for insurance companies that combine in their business the types of activities provided for in Clauses (1) and (2) of this Article.
4. One million Kuwaiti dinars for companies that carry on reinsurance business for any of the insurance activities.
The company shall deposit the amount of the statutory deposit within three months from the date on which the licence is granted.
Article 129
The Unit may raise the minimum deposit according to the size and nature of the activity carried on by the company and according to the risks it faces, in the cases that the Unit considers justified on the basis of the information warranting it.
The company shall submit to the Unit a statement of the funds required to be kept in Kuwait and of the avenues and ratios of investment of policyholders’ rights in accordance with the rules and instructions issued by the Unit in this regard.
Article 130
The deposit shall take the form of cash, and it may be in the form of securities, a bank guarantee from one of the banks operating in Kuwait, or a real estate mortgage over property located in Kuwait.
The value of the shares, bonds, bank guarantees, sukuk and real estate mortgages that may be submitted as a deposit, their value, the manner of their valuation and periodic revaluation, and the proportion of the cash amount of this deposit shall be as follows:
| Type of deposit | Valuation bases | Cash amount percentage | |
|---|---|---|---|
| Bank guarantees issued by a bank operating in Kuwait | – | A certificate from the bank stating the value of the guarantee, provided that the term of the guarantee is not less than (12) calendar months. | – |
| Securities – shares, bonds, sukuk – listed on the local capital markets. | Valued on a semi-annual basis | A valuation issued by an asset valuer licensed by the Capital Markets Authority under Law 7/2010 and its Executive Regulations, as amended. | 50% |
| A real estate mortgage within the State of Kuwait, excluding usufruct rights. | Valued on an annual basis | The valuation shall be carried out by at least two entities specialised and licensed to practise the profession of real estate valuation, one of which shall be a Kuwaiti bank, and the lower valuation shall be adopted. | 75% |
Article 131
Where an insurance company defaults on the payment of its insurance obligations arising from insurance business and its deposit is liquidated, the Unit shall collect a fine for the liquidation of the deposit at the rate of (2%) of the value of the amount liquidated, and of not less than one hundred Kuwaiti dinars, to be paid in accordance with the instructions issued by the Unit in this regard.
Article 132
Where the value of the deposit falls below the limit referred to in Article (30) of the Law, for whatever reason, the company or the branch shall pay the difference within a period not exceeding (60) sixty days from the date on which it occurred, and the Unit may request from the bank with which the deposit is held any information or data relating to it.
Article 133
The deposit shall be placed with a bank in the name of the company or the branch and to the order of the Unit, and the returns on the deposit shall belong to the company. Where the deposit takes the form of a real estate mortgage, it shall be registered in accordance with the provisions of the Real Estate Registration Law in the name of the Unit, and the company shall ensure that the registration is renewed on time and shall bear the expenses of registration and renewal. The pledge of shares, bonds and sukuk shall be made in accordance with the provisions of the aforementioned Law Establishing the Capital Markets Authority and in the name of the Unit.
In all cases, the deposit may not be attached except for debts arising from the insurance business carried on by the company or the branch.
Article 134
The deposit may not be replaced or disposed of in any manner whatsoever except after the approval of the Unit, and in cases of liquidation, cessation of activity or portfolio transfer, permission to dispose of it may not be given except after verifying that the company or the branch has fulfilled all obligations arising from insurance business.
Where the deposit takes the form of a real estate mortgage, the registration may not be cancelled except in accordance with the provision of Article (997) of the aforementioned Civil Code.
Article 135
Licensed companies shall notify the Unit, within (5) five working days at most, of all dispositions and final enforceable judgments that would create, transfer, alter or extinguish a real right in immovable property, before their legal registration, and that relate to the funds required to be kept, in a manner affecting financial solvency and the technical provisions in accordance with the Law and these Regulations.
Article 136
Policyholders and beneficiaries of policies concluded and performed by the company in Kuwait shall have a privilege over the funds kept in accordance with Article (35) of the Law, ranking after the privilege established in paragraph (a) of Article (1074) of the aforementioned Civil Code.
Chapter Two: Solvency Margin
Article 137
Companies licensed to carry on insurance activity shall maintain a financial solvency margin and technical provisions that enable them to meet their financial obligations. The financial solvency margin and the technical provisions shall be calculated at least once every year, provided that the company submits the documents relating thereto.
The calculation of the financial solvency margin and the technical provisions shall be reviewed once every three years by an independent audit firm accredited with the Unit.
Article 138
Where the company combines in its business life insurance and capital formation operations activities and their classes with general and property insurance activities and their classes and/or liability insurance activities and their classes, it shall separate the assets of each type, and assets arising from the issue of bonds or from borrowing may not be counted for the purpose of calculating the solvency margin except with the prior approval of the Unit.
Article 139
The company shall value its assets for the purpose of calculating the solvency margin in accordance with the requirements specified by the Unit, and shall observe the following:
1. The valuation of assets shall not exceed their market value, with the exception of assets relating to life insurance and capital formation operations activities and their classes that are linked to the investment component.
2. Investment in a single asset shall not exceed (20%) twenty per cent of total assets.
Article 140
A company that carries on general and property insurance activities and their classes shall maintain the required financial solvency margin by adopting the higher margin according to any of the following three methods:
1. The minimum capital.
2. Aggregate written premiums.
3. The claims method.
The application of the aggregate written premiums method in calculating the solvency margin for the first three years from the company’s registration in the Unit’s register shall be excepted from this.
Article 141
The required solvency margin shall be calculated using the following:
First: The aggregate written premiums method:
1. The aggregate written premiums for the classes of insurance shall be classified as follows:
| Type of insurance | Relative factor |
|---|---|
| Health insurance / fire insurance / all other types of insurance except life insurance and capital formation operations and their classes | 16% |
| Motor insurance | 20% |
| All types of liability insurance and their classes / engineering insurance / marine insurance / aviation insurance / energy insurance / acceptance of facultative and treaty reinsurance for all classes of insurance | 30% |
2. The net premiums for each class shall be calculated after deducting the reinsurance attributable to it, such that they are not less than (50%) fifty per cent of the gross premiums for that class.
3. The required solvency margin shall be calculated by multiplying the relative factor by the adjusted net premiums.
Second: The claims method:
1. Aggregate claims shall be classified on the basis of the historical data for the preceding three years.
| Type of insurance | Relative factor |
|---|---|
| Health insurance / motor insurance / fire insurance | 25% |
| Engineering insurance / marine insurance / aviation insurance / energy insurance / all other types of insurance except life insurance and capital formation operations and their classes / acceptance of facultative and treaty reinsurance for all classes of insurance | 30% |
| All types of liability insurance and their classes | 35% |
2. Net claims for each class shall be calculated after deducting the reinsurance share, such that they are not less than (50%) fifty per cent of the gross claims for that class.
3. The required solvency margin shall be calculated by multiplying the relative factor by the adjusted net claims.
Article 142
A company that carries on life insurance and capital formation operations activities and their classes shall maintain a solvency margin equal to the sum of the following:
1. (5%) five per cent of the technical provisions relating to life insurance and capital formation operations and their classes.
2. (0.3%) three per thousand of the total cover for individuals after deducting the reinsurance share, provided that the reinsurance share does not exceed (50%) fifty per cent of the total cover.
3. (0.1%) one per thousand of the total cover for groups after deducting the reinsurance share, provided that the reinsurance share does not exceed (50%) fifty per cent of the total cover.
Article 143
The company shall calculate the actual and required solvency margin and shall calculate a solvency margin in respect of the investment risks relating to the company’s allocated and unallocated assets.
Article 144
Where the solvency margin falls below the required level, the company shall take the following:
1. If the actual solvency margin is between (75%) and (100%) of the required solvency margin, the company shall work to adjust this ratio so that it becomes at least (100%) within the following quarter.
2. If the actual solvency margin is between (50%) and (75%) of the required solvency margin, or if what is stated in paragraph (1) above has not been complied with for two consecutive quarters, the company shall submit to the Unit a corrective plan setting out the steps that the company will take to improve its financial solvency and the time period required for that.
3. If the actual solvency margin is between (25%) and (50%) of the required solvency margin, or if what is stated in paragraph (2) above has not been complied with for two consecutive quarters, the Unit may oblige the company to take all or any of the following measures:
(a) Increasing the company’s capital.
(b) Adjusting prices.
(c) Reducing costs.
(d) Ceasing to accept any new underwriting.
(e) Liquidating some assets.
(f) Any other measure that the company considers appropriate and that the Unit approves.
4. If the actual solvency margin falls below (25%), or the company fails to rectify its financial position, the Unit may appoint a consultant – at the company’s expense – to advise it, or request the revocation of the company’s licence.
Provisions (technical reserves)
Article 145
Technical provisions shall be calculated in accordance with the accounting standards by, and with the approval of, an actuary, provided that they fairly reflect the company’s obligations and include, as a minimum, the following technical provisions:
1. Unearned premium provisions.
2. Outstanding claims provisions.
3. Claims settlement expense provisions.
4. Provisions for risks incurred but not yet reported.
5. Unexpired risk provisions.
6. Catastrophe provisions.
7. General expense provisions.
8. Provisions relating to life insurance and capital formation operations and their classes.
Article 146
The following provisions shall be determined, as a minimum, as follows:
1. Unearned premium provisions shall be calculated by deduction from the net retained premium income and the insurance commissions, upon issue of the insurance policy, that fall due in the subsequent period, as unearned premiums and unearned commissions respectively, and they shall be deferred as follows:
(a) The last three months method for marine transport.
(b) The (365) three hundred and sixty-five days method for other types of insurance, or (40%) forty per cent of total net contributions and commissions.
2. Outstanding claims provisions and claims settlement expense provisions shall be calculated so that their value equals the total estimated value of all pending claims for each class of general and property insurance and their classes.
3. Provisions for risks incurred but not yet reported shall be calculated from total outstanding claims after deducting the reinsurers’ share, as follows:
(a) Motor, property, engineering, energy, medical and general accident insurance, excluding liabilities and bodily injury: (15%) fifteen per cent.
(b) Liability insurance and other insurance: (20%) twenty per cent.
(c) Insurance accepted from other companies: (25%) twenty-five per cent.
If the company does not adhere to these ratios, it shall submit a study by an actuary.
Article 147
Provisions for doubtful debts shall be calculated, as a minimum, as follows:
1. (15%) fifteen per cent of the total amounts due from insureds that are more than (90) ninety days overdue.
2. (25%) twenty-five per cent of the total amounts due from insureds that are more than (180) one hundred and eighty days overdue.
3. (75%) seventy-five per cent of the total amounts that are more than (365) three hundred and sixty-five days overdue.
4. (100%) one hundred per cent of amounts due that are disputed.
5. A general provision determined in the light of the company’s experience.
Chapter Three: Records and Accounts
Article 148
Companies licensed to carry on insurance activities shall allocate a separate register for each type of insurance they carry on.
The company shall keep accounting records and any other records, as the case may be, in order to identify all the assets and liabilities relating to each type.
The Unit may oblige the company to allocate a separate register for one or more classes of insurance falling within a single type.
The company shall adhere to the controls relating to records set out in this Chapter.
Types of records
Article 149
The company shall keep adequate records of all the business it carries on, including the following:
1. A register of insurance or takaful underwriting and the issue of policies, and policy follow-up records.
2. A claims register.
3. A complaints register.
4. A technical provisions register.
5. A financial solvency register.
6. A register of the products offered by the company.
7. Takaful reinsurance contracts and related records.
8. An investment register.
9. The records required for actuarial reports.
10. A register of the company’s transactions with its associate and subsidiary companies.
11. A register of the participants’ accounts under management.
12. A register of shareholders’ accounts.
13. A register of the company’s principal agreements.
14. A register of the policies and procedures for all of the company’s operational processes, including risk management policies and procedures.
15. Records of the holders of insurance-related professions.
16. Any other records requested by the Unit.
What is issued by the Unit concerning the detailed provisions on the types of records shall be adhered to.
General requirements for records
Article 150
A company carrying on insurance activities shall keep complete records of the transactions of all local and international operations, and records of completed transactions may be kept in paper and/or electronic form, provided that the records of completed operations relating to concluded business are kept in an appropriate manner and in a place readily accessible to the Unit.
Article 151
Each record, document, message, transaction, signature and notification made electronically shall produce the same legal effects as written papers, documents and signatures in terms of their binding force on their parties, their evidential weight or their probative force, where they are made in accordance with the aforementioned Electronic Transactions Law.
Record retention period
Article 152
The retention period for records and their backup copies, in addition to any records and data relating to them, shall be (10) ten years from the date on which the activity or the business relating to it ends, unless the purposes for which they were created require a longer period.
Extension of the record retention period
Article 153
Companies shall retain records for periods longer than the period set out in Article (155) of these Regulations where the records are subject to ongoing investigations by the Unit or to judicial proceedings, for two additional years from the date on which a final judgment or a decision of the Unit in this regard is issued.
Article 154
The company shall submit any records or information requested by the Unit concerning it or any company with which it has an ownership relationship, within the time period specified by the Unit.
Chapter Four: Statements of the Company’s Financial Position
Article 155
The financial year of companies licensed to carry on insurance activity shall begin on 1 January and end on 31 December of each year, except for new companies, whose first financial year shall begin from the date of their registration in the Commercial Register and end on 31 December of the same year. The company shall submit annually to the Unit, within the (90) ninety days following the end of the financial year, its financial position approved by each of the Board of Directors, the auditor and the actuary.
Preparation of financial statements
Article 156
The company shall prepare its financial statements in accordance with the accounting policies and the International Financial Reporting Standards, and shall provide the Unit with them in accordance with the provisions of the Law and these Regulations.
Article 157
The company shall prepare separate financial statements for each type of insurance and consolidated financial statements in accordance with the forms prepared for this purpose as determined by the Unit.
Article 158
The company shall submit its financial statements in accordance with the detailed financial reporting controls determined by the Unit, signed by the Chairman of the Board of Directors or whoever acts on his behalf and reviewed 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.
Requirements for preparing financial statements and reports
Article 159
Where errors are found in the financial statements submitted by the company, the Unit may request the correction of those errors and the resubmission of the financial statements within the period specified by the Unit.
Annual report
Article 160
The company shall provide the Unit with an annual report including the following:
1. The report of the company’s auditor on the audited financial statements and the notes, as required by the Unit.
2. The report of the company’s Board of Directors.
3. The report of the company’s actuary.
4. The report of the Sharia Supervisory Board, for takaful insurance companies.
5. The profit and loss statement.
6. A statement of total written, earned and retained premiums for the financial year.
7. A detailed statement of the volume of the company’s investments.
8. A statement of the technical reserves for each type of insurance.
9. A statement of the return on investment for the financial year.
10. A statement of senior management expenses.
11. Any other statements requested by the Unit.
Chapter Five: Obligations Relating to Life Insurance and Capital Formation Operations
Article 161
Companies carrying on life insurance and capital formation business shall examine their financial positions relating to that class and shall estimate the value of the outstanding obligations of each of them, including all operations concluded by the company in Kuwait and abroad, each separately, at least once every three years, by an actuary.
Cases requiring a valuation of the company’s liabilities
Article 162
The estimation referred to in the preceding Article shall be carried out in the following cases:
1. Where the company wishes to examine its financial position for the purpose of determining the rates of profit to be distributed to shareholders, policyholders or participants.
2. Where the Unit requests that the estimation be carried out at any time before three years have elapsed since the previous estimation, provided that at least one year has passed since the date of the last examination.
Contents of the actuary’s report
Article 163
The actuary’s report on the result of the examination and estimation shall include data relating to the following:
1. Examining the policy forms, terms, tariffs and rates for the various classes of insurance used by the company, to verify the extent of the company’s compliance with the policy forms, terms, tariffs and rates approved by the Unit or notified to it, in order to verify the adequacy and fairness of the rates and that the company’s method of operation does not expose its financial position to risk or cause harm to those dealing with it.
2. Examining the indemnities paid to verify that they were settled in accordance with the policy terms, and studying outstanding claims to verify the reasons for their non-payment.
3. Examining reinsurance operations and reinsurance arrangements to verify their adequacy to protect the company’s financial position, as well as the adequacy of the guarantees relating to reinsurers.
4. Examining the company’s investment operations to verify the company’s compliance with the provisions of the Law, these Regulations and the decisions and instructions issued in this regard, particularly those relating to the adequacy of the allocated funds, their employment and their not being disposed of without obtaining the approval of the Unit.
5. Examining the elements of the company’s financial position and verifying that the company meets the ratio of excess of its assets over its liabilities at any time, in accordance with the provisions established in this regard.
6. Examining the company’s ability to meet its obligations at any time, the extent of its ability to continue meeting its obligations and the likelihood of its default thereon.
7. The extent of the company’s compliance with the conditions of licensing and registration, stating the violations committed and their nature – if any – and the extent of their impact on the company’s financial position and on the insurance market.
8. All insurance operations concluded or performed by the company within the State, and their type.
9. All insurance operations concluded or performed by the company outside the State, and their type, in respect of local insurance companies.
10. The extent of the company’s compliance with the rules and principles relating to transparency and integrity.
11. Any conflict of interest that existed, exists or is expected to arise in respect of any of the members of the Board of Directors, the Chief Executive Officer, the General Manager of the company, the authorised manager or any of the key employees of the company.
12. Any other data specified by the Unit.
Provision of the actuary’s report to the Unit
Article 164
The company shall send to the Unit a copy of the actuary’s report on the result of the examination and valuation within (60) sixty days from the date of expiry of the period for which the examination was conducted, accompanied by the following:
1. A statement of the insurance policies in force that the company concluded in Kuwait or abroad as at the date of the examination; if the person carrying on the activity is a branch of a foreign company, the statement shall be limited to the policies concluded in Kuwait or performed therein.
2. A declaration by the Chairman of the company’s Board of Directors that all the data and information necessary to arrive at a correct report have been placed at the actuary’s disposal.
The Unit may extend the period for sending the report by a maximum of (60) sixty days from the date of expiry of the period provided for in this Article.
Article 165
If it becomes apparent to the Unit that the actuary’s report does not reflect the true financial position of the company, it may order that the examination be repeated, at the company’s expense, by an actuary selected by the Unit for this purpose.
The actuary selected by the Unit shall, in his work, follow the provisions and procedures set out in the Law, in this Chapter of these Regulations and in the other regulatory resolutions.
Chapter Six: Obligation to Submit Other Information
Article 166
Companies licensed to carry on insurance activity shall provide the Unit with the following:
1. Specimens of the insurance policies, including their conditions, exclusions and endorsements, and every amendment or change made to them, provided that documents and papers submitted in a foreign language are accompanied by an official translation into Arabic.
2. Any other data or documents requested by the Unit.
The company shall state, in all its official papers and correspondence, advertisements, signboards and publications issued by it, the activity it is licensed to carry on, and it shall also state its paid-up capital.
Any company is also prohibited from publishing any of the data required to be submitted unless approved by the Unit.
Chapter Seven: Investment Policy
Article 167
The company shall:
1. Invest in Kuwaiti dinars – or the equivalent in foreign currencies – a proportion of (50%) fifty per cent of the total assets available for investment; if the company wishes to reduce this proportion, the prior approval of the Unit shall be obtained.
2. Lay down a written investment policy, approved by the company’s Board of Directors, governing investment operations, methods of portfolio management and the allocation of investment assets.
Taking into consideration the risks surrounding the company and the region in which it operates, the company shall periodically analyse and study the risks surrounding the company and the region in which it carries on its activity; the company shall also take appropriate measures to manage those risks, and there shall, as a minimum, be an analysis of the following risks:
• Market risk.
• Credit risk.
• Interest rate risk.
• Currency exchange rate risk.
• Liquidity risk.
• Operational risk.
• Country risk.
• Legal risk.
• Reinsurance risk.
• Technology risk.
• Money laundering and terrorist financing risk.
3. That policy shall be reviewed, and a solvency margin for the risks of the investment portfolios shall be calculated, by the company’s risk management department in accordance with the requirements laid down by the Unit in this regard.
Article 168
When laying down its investment policy, the company shall ensure that the maturity of the invested assets is matched with the company’s obligations arising from the policies issued.
Article 169
The company may not use financial instruments such as financial derivatives and other off-balance-sheet items before obtaining the prior approval of the Unit. Nor may the company use such instruments for purposes other than the management of the investment portfolio, and the following shall be taken into consideration:
1. The securities shall be listed on a major financial market, capable of being liquidated within a short time, based on assets listed in the asset valuation schedule, and have a clear and known pricing method.
2. The company shall have sufficient provisions and assets to meet any obligations arising or likely to arise from investment in these instruments.
3. The party responsible for managing the portfolio shall be a company licensed by the Capital Markets Authority, or any company subject to another regulatory authority with the same competence.
Part Seven: Branches of Foreign Insurance Companies
Chapter One: Licensing Requirements for the Branch
Article 170
Approval of the licensing of branches of foreign insurance companies to carry on insurance activity in the State of Kuwait shall be subject to the following:
1. The companies shall offer advanced insurance products and services that are not provided by the existing insurance companies, or existing covers needed by the insurance market in Kuwait.
2. They shall carry on, in the home country, insurance activity and non-traditional covers as a core activity alongside carrying on the other fields of insurance.
3. The company shall be rated and classified by one of the international rating agencies for insurance companies designated by a resolution of the Unit, which shall also specify the rating grade.
4. Any other requirements laid down by the Unit.
Article 171
The application for the licensing of a branch of a foreign insurance company shall be accompanied by the following documents, authenticated and translated into Arabic:
1. A copy of the licence to carry on insurance business in the state of which the parent company holds the nationality, provided that it is issued and certified by the governmental supervisory and oversight authority, including the type of insurance and the classes of insurance it is authorised to carry on.
2. A certificate from the governmental supervisory and oversight authority in the home country stating that the applicant is currently licensed to carry on the same insurance activities for which the licence application is submitted, that it enjoys financial solvency and fulfils all the regulatory requirements of that authority, and that it has carried on the activity for at least the past three years.
3. A resolution of the administrative body of the parent company to open a branch.
4. Submission of copies of the company’s balance sheet for the two preceding years, duly certified by an accredited audit firm.
5. A copy of the profile report on the parent company, its organisation, its activity and the markets in which it operates.
6. A declaration concerning the powers granted by the parent company to the branch.
7. The business plan of the company’s branch for the first three years.
8. A certificate from an actuary, in the case of life insurance and capital formation, including the following:
(a) His approval of the bases for calculating the insurance premiums.
(b) The adequacy of the technical provisions and the extent of the ability to comply with the solvency margin and the minimum guarantee amount.
9. The other approvals and licences required to be obtained under the laws and regulations in force.
10. Copies of the specimen agreements that the branch will conclude in future with providers of insurance professions.
11. Any other data or documents determined by the Unit.
Article 172
Branches of foreign insurance companies operating in the State of Kuwait shall be exempted from the application of the provisions of Articles (68) and (69) of these Regulations.
Branches of foreign insurance companies shall comply with the rules provided for concerning the obligations of companies licensed to carry on insurance activity set out in Part Six of these Regulations.
Article 173
Foreign insurance companies that have one or more branches in the State of Kuwait shall, when submitting an application for renewal of the licence, submit to the Unit evidence that they are still registered in accordance with the provisions of the law of the state in which their head office is located.
Chapter Two: Appointment of the Branch Manager
Article 174
Foreign insurance companies that have branches in the State of Kuwait shall appoint one or more authorised managers to carry on insurance business on behalf of the company, which shall be responsible for his acts, and the company shall obtain the approval of the Unit upon the appointment of the manager.
The appointment resolution shall be accompanied by an official document granting the authorised manager all the powers necessary to manage the branch, including the following:
1. Issuing insurance policies and their endorsements and paying the indemnities arising thereunder.
2. Representing the company before the Unit, the competent courts and all other governmental and non-governmental entities in respect of the business and management of the branch.
3. Receiving notices of default and all other notifications and correspondence addressed to the company, and responding to them.
Chapter Three: Submission of Financial Statements
Article 175
A branch of a foreign insurance company shall submit to the Unit, for each financial year, detailed financial statements on the balance sheet, the revenue and expenditure account and the profit and loss account relating to the branch in the State of Kuwait and to the head office, in accordance with the requirements for the submission of financial statements set out in Chapter Three of Part Five.
Part Eight: Insurance Intermediaries and Insurance Professions
Chapter One: Insurance and/or Reinsurance Brokerage Companies
Register of insurance and/or reinsurance brokers
Article 176
A register called the (Register of Insurance and/or Reinsurance Brokers) shall be kept at the Unit, in which shall be entered all insurance and/or reinsurance brokers whose registration is approved in accordance with the provisions of these Regulations, and the following data, and any amendments thereto, shall be recorded in the register:
– The name of the insurance and/or reinsurance broker
– The registration number and date.
– The legal form and the amount of capital.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, if any.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other data determined by the Unit.
Article 177
Insurance brokerage companies subject to the provisions of the Law and these Regulations shall keep a special register in which they enter the name and address of each insurance company for whose account they conduct insurance or reinsurance operations.
Auditor of an insurance and/or reinsurance brokerage company
Article 178
Insurance brokerage and/or reinsurance brokerage companies shall appoint an auditor registered with the Unit, and they shall submit annual financial statements of the company approved by the auditor, including the volume of operations and the commissions paid by the insurance companies with which they deal.
Article 179
An insurance and/or reinsurance broker may combine brokerage business in life insurance and capital formation operations, on the one hand, with brokerage in property and liability insurance, on the other, provided that the books and records of those activities are completely separated.
An insurance and/or reinsurance broker may specialise in one of the insurance activities or in one or more classes of insurance activities.
An insurance broker may combine insurance brokerage business and reinsurance brokerage business in accordance with the provisions of the Law and these Regulations, taking into account that such business shall not be combined for the same operation and for the same party for whose account it acts.
Business and activities prohibited to insurance and/or reinsurance brokerage companies
Article 180
Insurance and/or reinsurance brokerage companies are prohibited from the following:
1. Collecting from policyholders any additional amounts other than the insurance premium determined by the insurance company.
2. Representing policyholders in the settlement of the claims due to them.
3. Undertaking insurance consultancy business other than that relating to the brokerage contracts binding them with insurance companies.
4. Combining the capacity of an insurance broker with any other insurance profession.
5. Being a partner or agent of any other insurance broker.
Except for motor insurance, brokerage companies may not collect premiums from their clients for their own account or in their own name, and all client payments shall be made in the name of the insurance company issuing the policy.
Section One: Licensing and Registration Conditions
Article 181
It shall be a condition for obtaining a licence to carry on insurance brokerage and/or reinsurance brokerage activity that the applicant be a juristic person taking one of the forms of companies incorporated in Kuwait in accordance with the provisions of the aforementioned Companies Law or Law No. (116) of 2013 on the Promotion of Direct Foreign Investment, and that its object be to carry on insurance brokerage and/or reinsurance brokerage activity.
Article 182
The company shall have a Kuwaiti manager, subject to the following conditions:
(a) He shall be full-time and have experience in the field of insurance.
(b) He shall enjoy full legal capacity.
(c) He shall not have previously been sentenced for a felony to a custodial penalty, or for an offence of bankruptcy by default or by fraud, or for an offence involving dishonour or breach of trust.
(d) Any other conditions laid down by the Unit.
Article 183
The paid-up capital of an insurance brokerage and/or reinsurance brokerage company shall not be less than the following:
1. A company carrying on insurance brokerage activity: an amount of KWD (100,000) one hundred thousand Kuwaiti dinars.
2. A company carrying on reinsurance brokerage activity: an amount of KWD (200,000) two hundred thousand Kuwaiti dinars.
3. A company carrying on insurance brokerage and reinsurance brokerage activity: an amount of KWD (300,000) three hundred thousand Kuwaiti dinars.
Article 184
An insurance and/or reinsurance broker shall, when applying for the issuance or renewal of the licence, submit a letter of guarantee in favour of the Unit and an insurance policy covering the professional liability arising from damage resulting from the carrying on of its activity, unintentional error, omission and unintentional negligence, in accordance with the terms and conditions set out in Section Four of this Chapter.
Article 185
An insurance and/or reinsurance broker shall comply with the following:
1. Submitting a true copy of the agreement concluded between it and one of the banks operating in Kuwait concerning the account designated for carrying on insurance and/or reinsurance brokerage activity.
2. Providing the technical and administrative staff necessary to carry on the activity, and providing suitable premises and the electronic programmes and technical systems necessary to carry on the activity.
3. Providing suitable means that ensure compliance with the provisions of the Law, these Regulations and the instructions, resolutions and rules issued in this regard.
4. Any other requirements laid down by the Unit.
Section Two: Licence Application
Article 186
The application for a licence to carry on insurance and/or reinsurance brokerage activity shall be submitted to the Unit on the form prepared for that purpose, accompanied by the following information, data and documents:
1. The memorandum of association and the articles of association.
2. The commercial licence of the licence applicant.
3. A certificate of the name of the partner or partners and of the members of the Board of Directors or the manager.
4. A certificate that the partner or partners and the manager or the members of the Board of Directors and the Chief Executive Officer have not previously been sentenced for a felony to a custodial penalty, or for an offence of bankruptcy by default or by fraud, or for an offence involving dishonour or breach of trust.
5. The types and classes of insurance relating to the type of insurance for which the licence is requested.
6. The staff training plan.
7. Submission of an undertaking to fulfil all the required licensing conditions, in the event that the application is approved, within the period determined by the Unit, failing which the approval shall be deemed null and void.
8. Any other documents or data requested by the Unit.
Decision on the licence application
Article 187
The Unit shall issue its decision approving or rejecting the licence application within a period not exceeding (30) thirty days from the date of submission of the application fulfilling all the requirements of the preceding Article.
If the licence application is approved, the insurance and/or reinsurance broker shall be entered in the Register of Insurance and/or Reinsurance Brokers at the Unit, and in the event of rejection the decision shall be reasoned.
An insurance and/or reinsurance broker may add a type or class of insurance to the licence granted to it by means of an application submitted to the Unit on the form prepared for this purpose, after fulfilling the relevant conditions and requirements.
Licence term
Article 188
The term of the licence shall be three years from the date on which it is granted, and it shall be renewed upon an application submitted by the company in accordance with the provisions of this Chapter of these Regulations.
Article 189
The licence shall be renewed by means of an application submitted to the Unit in accordance with the terms and conditions required for the issuance of the licence, at least two months before the expiry of the term of the licence, provided that the Unit issues its decision on the application within (30) thirty days from the date of its complete submission.
Section Three: Cessation of the Company’s Business or Suspension and Revocation of the Licence
Temporary cessation
Article 190
An insurance and/or reinsurance broker that wishes to cease carrying on the activity temporarily, or that becomes subject to a cause preventing it from carrying on its activity, shall submit an application to the Unit for temporary cessation of the activity, while continuing to carry on its activity until the Unit’s decision is issued; the Unit may reject or approve the cessation application after the fulfilment of all the requirements it deems appropriate to serve the interests of the persons concerned, provided that the period of cessation does not exceed (3) three months from the date of its approval, and it may be extended for another similar period not exceeding the term of the licence, with the insurance and/or reinsurance broker remaining bound by the conditions and requirements that the Unit deems necessary for the continuation of its licence, and retaining the letter of guarantee during that period.
An insurance and/or reinsurance broker may not carry on its activity during the period of cessation, and in all cases it shall be entitled to apply to resume carrying on the activity before the expiry of the period specified for the temporary cessation, whether the cessation was voluntary or followed the removal of the impediment.
Permanent cessation
Article 191
An insurance and/or reinsurance broker that wishes to cease carrying on the activity permanently shall submit an application to the Unit to that effect, including evidence of its discharge from all liabilities towards all the insurance companies with which it deals, while continuing to carry on its activity until it fulfils all the requirements for the revocation of the licence determined by the Unit and the Unit’s decision is issued.
The revocation decision shall be issued by the Unit and published immediately upon its issuance in the Official Gazette, and also in two widely circulated daily newspapers published in Kuwait, one in Arabic and the other in English, at the expense of the insurance broker, provided that the letter of guarantee is recovered after the lapse of (3) months from the date of publication, if the Unit approves this after the settlement of all the insurance broker’s dealings and verification that it has no obligations towards the Unit or the persons concerned arising from its carrying on of insurance or reinsurance brokerage activity.
Closure or revocation of the licence of an insurance and/or reinsurance brokerage company
Article 192
The Unit may notify an insurance and/or reinsurance brokerage company that violates the provisions of the Law and these Regulations of the violations attributed to it, so that it may rectify them within (60) sixty days from the date of notification.
If the violations attributed to it are not rectified within the said period, the company shall be closed administratively by a reasoned decision of the Unit for a period not exceeding (90) ninety days.
In the event that the violation is repeated or continues, the company shall be closed permanently, its licence shall be revoked and it shall be struck off the Register of Insurance and/or Reinsurance Brokerage Companies and Branches by a decision of the Unit.
Section Four: Provisions on the Letter of Guarantee and the Professional Liability Insurance Policy
Conditions for issuing the letter of guarantee
Article 193
The letter of guarantee shall be subject to the following conditions:
1. It shall be issued by one of the banks operating in Kuwait in favour of the Unit.
2. The value of the letter of guarantee shall not be less than (50%) of the paid-up capital of the company.
3. It shall be unconditional, unrestricted and payable on demand – by the Unit – and shall not be cancelled except with the approval of the Unit.
4. It shall be issued for the purposes of guaranteeing the settlement of the dealings of the insurance or reinsurance broker and the fulfilment of its obligations arising from its carrying on of its activity towards the persons concerned, or its obligations towards the Unit.
Article 194
The Unit shall have the right to liquidate the letter of guarantee submitted by the insurance or reinsurance broker for the reasons set out in Clause (4) of the preceding Article.
Conditions for issuing the professional liability insurance policy
Article 195
The insurance policy shall be subject to the following conditions:
1. It shall be issued by a company licensed and registered with the Unit, and after the Unit’s approval of its terms.
2. It shall be issued in the name of the insurance and/or reinsurance broker.
3. It shall be in force throughout the term of the licence.
4. The sum insured under the policy shall not be less than KWD (250,000) two hundred and fifty thousand Kuwaiti dinars.
No amendment or change may be made to the policy except with the approval of the Unit.
Section Five: Obligations of the Insurance Broker
Obligations of the insurance or reinsurance broker towards the Unit
Article 196
An insurance and/or reinsurance broker shall, in carrying on the activity, comply with the following:
1. A correspondence registration system.
2. An internal record-keeping system.
3. A system for recording clients’ complaints.
4. Opening a separate account with one of the banks operating in Kuwait, designated solely for financial transactions relating to insurance or reinsurance brokerage business.
5. Complete separation between its own accounts and its accounts relating to its carrying on of insurance or reinsurance brokerage activity.
6. Refraining from obtaining any interest on the premiums received and deposited in the insurance or reinsurance brokerage business account, from holding them in the form of fixed deposits, and from obtaining credit facilities or bank loans secured by these funds.
7. Maintaining the financial solvency necessary to carry on its activity, so as to ensure the continuous fulfilment of its obligations in accordance with the rules laid down by the Unit.
8. Adhering to the limits of the types and classes of insurance that it is licensed to carry on.
9. Not managing or bearing any insurance risks.
10. Concluding at least two insurance or reinsurance brokerage agreements with companies within (60) sixty days from the date of the licence, and providing the Unit with a true copy of those agreements within (10) ten days at most of their conclusion, and also providing it with any amendment or change made to them immediately upon its occurrence.
11. Retaining the records, documents, accounts and financial statements that show its financial position, its dealings, the insurance or reinsurance brokerage agreements with companies, the mandates issued to it by clients, clients’ data, copies of the insurance policies issued to them and any documents or data relating to the carrying on of the activity, for a period of (10) years, provided that backup copies of those data and documents are retained for the same period in order to safeguard clients’ data and dealings and protect them from any cause of damage, and enabling the Unit to obtain them and to inspect everything relating to them immediately upon its request.
12. Providing the Unit with the following reports:
(a) A semi-annual report, after its review by the external auditor, on the insurance or reinsurance brokerage business and the related accounts, within a period not exceeding (30) thirty days from the end of the period.
(b) An annual report, after its review by the external auditor, including all the insurance or reinsurance brokerage business it carried on during the year, the related accounts, the final accounts and the annual balance sheet, accompanied by a copy of the brokerage agreements concluded with companies, within a period not exceeding (60) sixty days from the end of the financial year.
(c) Any other reports or data requested by the Unit.
13. Notifying the Unit immediately of any change occurring in the data or documents on the basis of which the licence was granted, within (10) days from the date of occurrence of such change, and of any deficit affecting its financial position.
14. Providing the Unit with the content of its advertising campaigns, through all their means, presented to the public.
15. Not publishing or promoting any incorrect data, information or transactions.
16. Not transferring the business it has brokered to another insurance or reinsurance broker or brokers except with the approval of the companies and the clients or beneficiaries, while notifying the Unit of the details of the transfer, in the event of temporary suspension or revocation of the licence, whether voluntarily or as a penalty.
17. Displaying the tariff for compulsory insurance in a place clearly visible to the public at the place of business.
18. Not using cash in any of the dealings of the insurance and/or reinsurance broker relating to brokerage business.
Obligations of the insurance broker towards the insurance or reinsurance company
Article 197
An insurance or reinsurance broker shall, towards the insurance or reinsurance company, comply with the following:
1. Signing an insurance or reinsurance brokerage agreement with each company with which it deals, provided that it is drawn up in Arabic – or translated by an accredited translation – signed by both parties and authenticated before the official authorities, that it remains in force throughout the period of its dealings with the company, and that it includes the rights and obligations of each party in a manner not inconsistent with the provisions of the Law and these Regulations, and in particular the following:
(a) The term of validity of the agreement and the manner of and grounds for its termination.
(b) The types or classes of insurance that are the subject of the brokerage.
(c) The geographical area of the brokerage business – if any.
(d) Evidence of the authorisation of the insurance or reinsurance broker to receive insurance premiums for the account of the company in the cases in which it may collect premiums, and that the premiums collected shall not be used for any other purpose.
(e) Inclusion of the agreed commission of the insurance or reinsurance broker, the method of its calculation, its due date and the procedures for its collection.
(f) That the insurance or reinsurance broker may not be authorised to issue insurance policies or their endorsements or to make amendments to them, except for the issuance of motor vehicle insurance certificates if both parties so wish.
(g) That the insurance broker may not be authorised to receive the indemnities due to clients or beneficiaries for the purpose of paying them to those entitled to them.
2. Providing all the information and data relating to clients that may affect the decision taken by the company regarding the insurance cover, its prices and its conditions, so as to enable the company to assess the risks to be insured or whose insurance is to be renewed.
3. Depositing the insurance premiums received by it, in the cases in which it may receive insurance premiums, in the account designated for carrying on insurance or reinsurance brokerage business.
4. Transferring the insurance premiums received to the company within a period not exceeding (15) days from the date of receipt of those premiums, without deducting any amounts or interest from those premiums, and providing the company with a detailed report thereon.
5. Not using papers bearing the name of the company for whose account it acts in its private correspondence or its correspondence with its clients.
6. Maintaining the confidentiality of the terms, prices, information and data that it obtains from the company, and not disclosing such data to other companies.
Obligations of the insurance or reinsurance broker towards its clients
Article 198
An insurance or reinsurance broker shall, towards its clients, comply with the following:
1. Obtaining a written mandate from the client to carry out insurance and/or reinsurance brokerage business, in accordance with the following:
(a) The mandate shall be for a specified purpose and for a specified period not exceeding (30) thirty days from the date of its delivery to the broker, and the client may revoke the mandate before the expiry of its period, all without charging the client any financial burden in consideration of the issuance or revocation of the mandate.
(b) The mandate shall include the broker’s powers to conduct communications and negotiations with the company specified by the client or with any other company licensed by the Unit.
2. Providing technical advice and consultation, informing the client of the best terms and prices offered by the companies, retaining the documents proving that it has done so and recording them in duly organised records, negotiating in the client’s interest and representing it before the company, and not receiving any commission for the negotiation work.
3. Taking into account the client’s interests, whether in comparing the terms, prices and scope of the insurance cover or in preferring to deal with one company over another, and not recommending or preferring a company merely because it offers a higher commission to the insurance or reinsurance broker.
4. Ensuring that the client is aware of and understands the type of service it provides to him and the nature of the relationship between them, and that the insurance policy meets the client’s requirements.
5. Notifying the client of all the details of the insurance policy in terms of the scope of the insurance cover, the client’s share of the loss (deductible), if any, the surrender value before the maturity date or the occurrence of the insured risk, and any conditions, exclusions or restrictions on the insurance policy.
6. Explaining the importance of disclosing the basic and material information when submitting the insurance application, and the consequences of concealment, inaccuracy or incorrectness of any data or documents submitted by him, while explaining his full responsibility for such data and information.
7. Explaining the importance of disclosing any subsequent changes that may affect the insurance cover during the term of the insurance policy.
8. Explaining the mechanism for paying the insurance premiums, the importance of paying them on the specified dates, and the consequences that may result from failure to observe those dates.
9. Sending the insurance policies to the clients without undue delay, accompanied by a notice of the necessity of reading the policy carefully.
10. Explaining the procedures that the client shall follow upon the occurrence of the insured risk, assisting in the negotiations conducted with the company in respect of the claims resulting from the occurrence of that risk, and notifying the client immediately of the company’s decision to accept or reject the provision of insurance cover for those claims.
11. Not allowing other insurance or reinsurance brokers to carry out insurance or reinsurance brokerage business relating to the client without obtaining the written approval of the client and of the insurance company.
12. Informing the client in writing, (30) thirty days before the expiry of the insurance policy, of its expiry date, so that the client may state his written wishes regarding:
(a) Whether or not to renew the insurance or reinsurance policy with the same insurance or reinsurance broker.
(b) Renewing the insurance or reinsurance policy with the same company on the same terms, or with the same company on different terms, or with another company in accordance with other offers presented to him by the insurance or reinsurance broker.
(c) Dealing in accordance with the requirements of the principles of good faith and transparency and the rules and ethics of professional practice, while respecting the confidentiality of clients’ data and information.
Section Seven: Rights of Insurance and/or Reinsurance Brokers
Article 199
Insurance companies of all types may not make direct contact with a client who has mandated an insurance or reinsurance broker.
Nor may they offer different conditions or prices to the client dealing with the mandated broker, or to another insurance or reinsurance broker, for the same insurance operation, unless the other insurance and/or reinsurance broker has provided different information affecting the company’s decision regarding the insurance conditions and prices.
The insurance company may not deduct the commission due to the insurance broker if the insured fails to pay the insurance premium as a result of financial default, bankruptcy or evasion of payment.
The brokerage mandate agreement may include a prohibition on the client from any negotiation or dealing with any other broker or insurance and/or reinsurance company on the same subject matter of the mandate during its term.
Section Eight: Branches of Insurance and/or Reinsurance Brokers
Article 200
The insurance broker may open branches inside Kuwait after obtaining the approval of the Unit for each branch separately, in accordance with the following conditions:
1. A resolution of the General Meeting of the insurance and/or reinsurance broker to open the branch shall have been issued.
2. A manager shall be appointed for the branch in accordance with the conditions issued by the Unit in this regard.
3. The title deed of the branch premises, or its lease contract certified by the competent authorities, shall be submitted.
4. Two years shall have elapsed since the insurance and/or reinsurance broker commenced the activity, without any penalties having been imposed during that period.
5. The value of the premiums generated by the insurance and/or reinsurance broker in the financial year preceding the application to open the branch shall not be less than KWD 500,000 (five hundred thousand Kuwaiti dinars), and motor premiums shall not exceed 20% of this amount.
Article 201
The application to open the branch shall be submitted on the form prepared for that purpose, accompanied by the information, data and documents supporting the application and proof of payment of the prescribed fees, and the Unit shall issue its decision approving or rejecting the opening of the branch within (30) thirty days from the date on which the complete application is submitted to the Unit.
The term of the branch’s licence shall be determined in accordance with the term of the parent company’s licence.
The branch’s licence shall be renewed in accordance with the general rules set out in these Regulations.
Article 202
The insurance and/or reinsurance broker may apply to close the branch, and the Unit shall issue its decision approving its closure within (30) thirty days from the date on which the complete application is submitted to the Unit.
Article 203
Without prejudice to the penalties set out in the Law and these Regulations, the Unit may revoke the approval issued for the branch if it ceases to meet any of the conditions on the basis of which the approval decision was issued, or if it violates any of the provisions of the Law, these Regulations, or the instructions, decisions or circulars issued in implementation thereof.
Chapter Two: Risk Assessors and Loss Adjusters
Article 204
No person may practise the profession of risk assessor or loss adjuster unless registered in the register prepared for that purpose at the Unit.
Register of risk assessors and loss adjusters
Article 205
A register called the (Register of Risk Assessors and Loss Adjusters) shall be kept at the Unit, in which shall be registered all risk assessors and loss adjusters whose registration is approved in accordance with the provisions of these Regulations, and the following data, and any amendments thereto, shall be entered in the register:
– The name of the risk assessor and loss adjuster.
– The registration number and date.
– The legal form and the amount of capital, where applicable.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, where applicable.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other data specified by the Unit.
Conditions for registration in the register of risk assessors and loss adjusters
Article 206
1. For the registration of individual risk assessors and loss adjusters in the Register of Risk Assessors and Loss Adjusters, the following conditions shall be met:
(a) He shall be a Kuwaiti national, a national of one of the Gulf Cooperation Council States, or a foreign national holding a valid residence permit in the State of Kuwait.
(b) He shall have full legal capacity.
(c) He shall hold a university qualification, in accordance with the controls and conditions determined by the Unit.
(d) He shall have practical experience in the field of risk assessment and loss adjustment in the fields of insurance of not less than five years, and shall have practised risk assessment and loss adjustment work independently or with a juristic person licensed to carry on risk assessment and loss adjustment work inside or outside the State.
(e) He shall be neither a shareholder in an insurance company, nor a member of its Board of Directors, nor one of its employees.
(f) He shall have no previous conviction for a felony punishable by a custodial penalty, or for the crime of negligent or fraudulent bankruptcy, or for a crime involving dishonour or breach of trust, unless he has been rehabilitated.
(g) He shall be free from any liability, established by virtue of a court judgment or a disciplinary decision, for a serious violation of any of the provisions of the Companies Law in his capacity as a general manager or a member of the Board of Directors of a company, including liability for the compulsory liquidation of the company.
2. Subject to the aforementioned Companies Law and Law No. (116) of 2013 on the Promotion of Foreign Direct Investment, the following shall be required for the registration of risk assessors and loss adjusters that are companies:
(a) The paid-up capital of the company incorporated in the State of Kuwait shall not be less than (10,000) ten thousand Kuwaiti dinars.
(b) Its objects shall include the activity of the profession of risk assessor and loss adjuster.
(c) The company shall have a manager/chief executive officer who meets the conditions and qualifications set out in paragraph (1) of this Article.
Article 207
Upon applying for the issuance or renewal of the licence, risk assessors and loss adjusters shall submit an insurance policy covering the professional liability arising from damage resulting from the practice of their activity, unintentional error, omission and unintentional negligence, in accordance with the following conditions:
1. It shall be issued by a company licensed and registered with the Unit, after the Unit has approved its terms.
2. It shall be issued in the name of the risk assessor and loss adjuster.
3. It shall remain valid throughout the term of the licence.
4. The sum insured under the policy shall not be less than (250,000) two hundred and fifty thousand Kuwaiti dinars.
No amendment or change may be made to the policy except with the approval of the Unit.
Licensing and registration procedures in the register of risk assessors and loss adjusters
Article 208
The application for licensing and registration in the Register of Risk Assessors and Loss Adjusters shall be submitted through the means approved by the Unit, and shall include the following information, data and documents:
1. A copy of the civil ID card or passport.
2. A certificate stating that the applicant for registration has not previously been sentenced to a penalty for a crime involving dishonour or breach of trust, and an official certificate stating that he has not previously been declared bankrupt, except if he has been rehabilitated.
3. A certified copy of the academic qualifications, practical experience certificates and training course certificates.
4. A statement of the classes of insurance in which the risk assessor and loss adjuster applies to be licensed to provide expertise.
5. A true copy of the company’s memorandum of association and articles of association, and of the company’s entry in the Commercial Register.
6. An undertaking that the manager will devote himself full-time to practising the licensed activity.
7. Any other documents requested by the Unit.
Article 209
The licence application shall be deemed not to have been submitted if the applicant fails, without an acceptable excuse, to submit the documents and information within the period specified by the Unit.
Article 210
The Unit shall decide on the application for licensing and registration in the Register of Risk Assessors and Loss Adjusters within (30) thirty days from the date of its receipt of the application complete with the data, information and requirements, and in the event of rejection, the decision shall be reasoned.
Article 211
If the licence application is approved, the licensee shall be registered in the Register of Risk Assessors and Loss Adjusters at the Unit and shall be granted a certificate of his registration stating his name, his address in the State of Kuwait, and the date and number of his registration in the register.
Article 212
The risk assessor and loss adjuster shall commence his work within three months from the date of his registration and of his notification of the registration.
Licence term and renewal
Article 213
The term of the licence shall be three years from the date of its grant, and it shall be renewed upon an application submitted (60) sixty days before the expiry of the term of the licence, on the form prepared for this purpose at the Unit, accompanied by the following:
1. The documents and data required to be submitted upon the issuance of the licence, as set out in this Chapter of these Regulations.
2. Proof of payment of the prescribed fees.
3. Any additional conditions or requirements determined by the Unit.
The Unit may suspend the risk assessor and loss adjuster from practising the activity if the complete renewal application is not submitted.
Article 214
The Unit shall issue its decision on the renewal application within (30) thirty days from the date of its submission complete, after verifying that the risk assessor and loss adjuster continues to comply with the provisions of the Law and these Regulations and has paid the prescribed fees.
Amendment of registration details
Article 215
The risk assessor and loss adjuster may apply to add or cancel a class of insurance in which he is to practise expertise work, on the form prepared for this purpose or through any other means approved by the Unit, provided that he submits the data and documents supporting his application.
In the event of completion of the procedures and payment of the prescribed fees, the registration particulars in the Unit’s register shall be amended.
Temporary cessation of activity
Article 216
A risk assessor and loss adjuster who wishes to cease practising the activity temporarily, or who is affected by a reason preventing him from practising his activity, shall submit an application for cessation to the Unit, and the period of cessation may not extend beyond three months, renewable for another equal period.
The risk assessor and loss adjuster may not practise his activity during the period of cessation, and in all cases he may apply to resume practising the activity before the end of the specified period if the cessation is voluntary, or after the reasons have ceased to exist.
Permanent cessation of activity
Article 217
A risk assessor and loss adjuster who wishes to cease practising the activity permanently shall submit an application to that effect to the Unit, and shall continue to practise his activity until all the requirements for the revocation of the licence requested by the Unit have been fulfilled, a decision has been issued by the Unit in this regard, all transactions previously assigned to him have been settled, and it has been verified that he has no obligations towards the Unit or towards any entity arising from his practice of his activity.
Cancellation of registration
Article 218
Risk assessors and loss adjusters shall meet all the conditions of licensing and registration on a continuous basis, and registration in the Register of Risk Assessors and Loss Adjusters shall be deemed a personal registration which he may not, under any circumstances, sell or assign, and in the event of a violation, the registration shall be cancelled from this register by a reasoned decision of the Unit.
If it becomes apparent to the Unit that any of the conditions of licensing and registration is no longer met, it shall issue a reasoned decision striking him off the register.
Duties of the risk assessor and loss adjuster
Article 219
The risk assessor and loss adjuster shall comply with the following:
1. In practising risk assessment and loss adjustment expertise work, to adhere to the limits of the classification stated in his registration.
2. To include his name and his registration number in the Register of Risk Assessors and Loss Adjusters at the Unit on all his papers, correspondence, documents and reports.
3. To comply with the laws, regulations, rules and the rules of integrity and transparency in performing his duties.
4. To prepare the risk assessment and loss adjustment expert report in a timely manner and without delay, provided that the report includes, at a minimum, the following data and information:
(a) A statement of the party requesting the expert report.
(b) The date of preparation and delivery of the expert report.
(c) A statement of the insured, the beneficiary of the insurance and the insurance broker, where applicable.
(d) A description of the insurance policy and its main clauses, in particular those relating to the damage that is the subject of the report.
(e) A statement of the damage and the causes of its occurrence, and a determination of the loss resulting therefrom.
(f) The technical opinion on the cover and the extent to which it covers the damage in kind and in quantity, and an assessment of the extent of the damage for which compensation is claimed and of the amount of compensation due.
5. To notify the Unit of any matter that he discovers or becomes aware of in the course of practising his work which constitutes a violation of the provisions of the Law, these Regulations, or the rules or decisions issued under any of them.
6. To notify the Unit immediately of any change or amendment to the conditions of his registration.
Article 220
The risk assessor and loss adjuster may not accept any tasks or operations assigned to him by the parties requesting the expert report if such tasks and operations conflict with the nature of his work or if he has an interest therein in any form whatsoever.
In all cases, the risk assessor and loss adjuster shall refrain from carrying out additional work that does not fall within the scope of the licence granted to him and that may affect his impartiality and independence.
Engaging risk assessors and loss adjusters
Article 221
Companies subject to the provisions of the Law and these Regulations may not engage risk assessors and loss adjusters who are not registered in the register prepared for that purpose at the Unit. However, after the approval of the Unit, unregistered experts may be engaged for a specified period in cases requiring special technical expertise.
Chapter Three: Insurance Consultants
Article 222
No person may practise insurance consultancy work unless registered in the register prepared for that purpose at the Unit.
Register of insurance consultants
Article 223
A register called the (Register of Insurance Consultants) shall be kept at the Unit, in which shall be registered all insurance consultants whose registration is approved in accordance with the provisions of these Regulations, and the following data, and any amendments thereto, shall be entered in the register:
– The name of the insurance consultant.
– The registration number and date.
– The legal form and the amount of capital, where applicable.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, where applicable.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other data specified by the Unit.
Conditions for registration in the register of insurance consultants
Article 224
1. A person to be registered in the Register of Insurance Consultants shall meet the following:
(a) He shall be a Kuwaiti national, a national of one of the Gulf Cooperation Council States, or a foreign national holding a valid residence permit in the State of Kuwait.
(b) He shall have full legal capacity.
(c) He shall hold a university qualification, in accordance with the controls and conditions determined by the Unit.
(d) He shall have practical experience in the field of insurance consultancy of not less than five years, and shall have practised insurance consultancy work.
(e) He shall have no previous conviction for a felony punishable by a custodial penalty, or for the crime of negligent or fraudulent bankruptcy, or for a crime involving dishonour or breach of trust, unless he has been rehabilitated.
2. Subject to the aforementioned Companies Law and Law No. (116) of 2013 on the Promotion of Foreign Direct Investment, the following shall be required for the registration of insurance consultants that are companies:
(a) The paid-up capital of the company incorporated in the State of Kuwait shall not be less than (10,000) ten thousand Kuwaiti dinars.
(b) Its objects shall include the activity of the profession of insurance consultant.
(c) The company shall have a manager/chief executive officer who meets the conditions and qualifications set out in paragraph (1) of this Article.
Article 225
Upon applying for the issuance or renewal of the licence, insurance consultants shall submit an insurance policy covering the professional liability arising from damage resulting from the practice of their activity, unintentional error, omission and unintentional negligence, in accordance with the following conditions:
1. It shall be issued by a company licensed and registered with the Unit, after the Unit has approved its terms.
2. It shall be issued in the name of the insurance consultant.
3. It shall remain valid throughout the term of the licence.
4. The sum insured under the policy shall not be less than (250,000) two hundred and fifty thousand Kuwaiti dinars.
No amendment or change may be made to the policy except with the approval of the Unit.
Licensing and registration procedures in the register of insurance consultants
Article 226
The application for licensing and registration in the Register of Insurance Consultants shall be submitted through the means approved by the Unit, and shall include the following information, data and documents:
1. A copy of the civil ID card or passport.
2. A certificate stating that the applicant for registration has not previously been sentenced to a penalty for a crime involving dishonour or breach of trust, and an official certificate stating that he has not previously been declared bankrupt, except if he has been rehabilitated.
3. A certified copy of the academic qualifications, practical experience certificates and training course certificates.
4. A true copy of the company’s memorandum of association and articles of association, and of the company’s entry in the Commercial Register.
5. An undertaking that the manager will devote himself full-time to practising the licensed activity.
Any other documents requested by the Unit.
Article 227
The licence application shall be deemed not to have been submitted if the applicant fails, without an acceptable excuse, to submit the documents and information within the period specified by the Unit.
Article 228
The Unit shall decide on the application for licensing and registration in the Register of Insurance Consultants within (30) thirty days from the date of its receipt of the application complete with the data, information and requirements, and in the event of rejection, the decision shall be reasoned.
Article 229
If the licence application is approved, the licensee shall be registered in the Register of Insurance Consultants at the Unit and shall be granted a certificate of his registration stating his name, his address in the State of Kuwait, and the date and number of his registration in the register.
Article 230
The insurance consultant shall commence his work within three months from the date of his registration and of his notification of the registration.
Licence term and renewal
Article 231
The term of the licence shall be three years from the date of its grant, and it shall be renewed upon an application submitted (60) sixty days before the expiry of the term of the licence, on the form prepared for this purpose at the Unit, accompanied by the following:
1. The documents and data required to be submitted upon the issuance of the licence, as set out in this Chapter of these Regulations.
2. Proof of payment of the prescribed fees.
3. Any additional conditions or requirements determined by the Unit.
The Unit may suspend the insurance consultant from practising the activity if the complete renewal application is not submitted.
Article 232
The Unit shall issue its decision on the renewal application within (30) thirty days from the date of its submission complete, after verifying that the insurance consultant continues to comply with the provisions of the Law and these Regulations and has paid the prescribed fees.
Temporary cessation of activity
Article 233
An insurance consultant who wishes to cease practising the activity temporarily, or who is affected by a reason preventing him from practising his activity, shall submit an application for cessation to the Unit, and the period of cessation may not extend beyond three months, renewable for another equal period.
The insurance consultant may not practise his activity during the period of cessation, and in all cases he may apply to resume practising the activity before the end of the specified period if the cessation is voluntary, or after the reasons have ceased to exist.
Permanent cessation of activity
Article 234
An insurance consultant who wishes to cease practising the activity permanently shall submit an application to that effect to the Unit, and shall continue to practise his activity until all the requirements for the revocation of the licence requested by the Unit have been fulfilled, a decision has been issued by the Unit in this regard, all transactions previously assigned to him have been settled, and it has been verified that he has no obligations towards the Unit or towards any entity arising from his practice of his activity.
Cancellation of registration
Article 235
The insurance consultant shall meet all the conditions of licensing and registration on a continuous basis, and registration in the Register of Insurance Consultants shall be deemed a personal registration which he may not, under any circumstances, sell or assign, and in the event of a violation, the registration shall be cancelled from this register by a reasoned decision of the Unit.
If it becomes apparent to the Unit that any of the conditions of licensing and registration is no longer met, it shall issue a reasoned decision striking him off the register.
Functions of the insurance consultant
Article 236
The insurance consultant shall provide the following services to his clients:
1. Studying the legal, technical and financial aspects of insurance or reinsurance operations and giving an opinion thereon on the basis of the legislation and decisions issued by the competent authorities in the State and the generally accepted insurance principles governing such operations.
2. Providing advice on the risks to be covered by insurance and preparing the basic elements of the insurance cover appropriate to such risks, in particular the size of the risks, the probability of their occurrence and the means available to cover them.
3. Studying the conditions of the insurance cover and giving an opinion thereon, including the deductible, the insurance premium, the term of insurance and the exclusions that are usually provided in respect thereof.
Rules and ethics of practising the profession of insurance consultant
Article 237
The insurance consultant shall comply with the following rules and ethics of professional practice:
1. To exercise due professional care in providing his consultations, so that the advice he provides is based on grounds consistent with the provisions of the legislation and decisions issued by the competent authorities and the generally accepted insurance principles.
2. His relationship with the client shall be under a written agreement.
3. To disclose immediately to the client any existing conflict of interest or any that arises during the term of the contractual relationship, and the client may request to continue performing the contract or to cancel it.
4. To maintain the confidentiality of the information, data and documents provided to him by the client or that come to his knowledge during or by reason of his work, unless such information, data and documents are required to be submitted under the laws.
7. Not to receive remuneration or fees for the work assigned to him from any entity or person other than the client with whom he deals.
Engaging insurance consultants
Article 238
Companies subject to the provisions of the Law and these Regulations may not entrust consultants who are not registered in the register prepared for that purpose at the Unit with carrying out insurance consultancy, study and expertise work. However, after the approval of the Unit, unregistered consultants may be engaged for a specified period in cases requiring special technical expertise.
Article 239
Insurance consultants may not combine the profession of insurance consultant with any of the other insurance-related professions.
Chapter Four: Actuaries
Article 240
No person may practise actuarial expertise work unless registered in the register prepared for that purpose at the Unit.
Register of actuaries
Article 241
A register called the (Register of Actuaries) shall be kept at the Unit, in which shall be registered all actuaries whose registration is approved in accordance with the provisions of these Regulations, and the following data, and any amendments thereto, shall be entered in the register:
– The name of the actuary.
– The registration number and date.
– The legal form and the amount of capital, where applicable.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, where applicable.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other data specified by the Unit.
Conditions for registration in the register of actuaries
Article 242
1. A person to be registered in the Register of Actuaries shall meet the following:
(a) He shall be a Kuwaiti national, a national of one of the Gulf Cooperation Council States, or a foreign national holding a valid residence permit in the State of Kuwait.
(b) He shall have full legal capacity.
(c) He shall hold a university qualification in accordance with the controls and conditions determined by the Unit.
(d) He shall have acquired practical experience in actuarial expertise work, after obtaining the qualification, for a period of not less than three years.
(e) He shall have worked in the field of insurance in an insurance company for a period of not less than 10 years.
(f) He shall have no previous conviction for a felony punishable by a custodial penalty, or for the crime of negligent or fraudulent bankruptcy, or for a crime involving dishonour or breach of trust, unless he has been rehabilitated.
2. Subject to the aforementioned Companies Law and Law No. (116) of 2013 on the Promotion of Foreign Direct Investment, the following shall be required for the registration of actuaries that are companies:
(a) The paid-up capital of the company incorporated in the State of Kuwait shall not be less than (10,000) ten thousand Kuwaiti dinars.
(b) Its objects shall include the activity of the profession of actuarial expertise.
(c) The company shall have a manager/chief executive officer who meets the conditions and qualifications set out in paragraph (1) of this Article.
Article 243
Upon applying for the issuance or renewal of the licence, the actuary shall submit an insurance policy covering the professional liability arising from damage resulting from the practice of his activity, unintentional error, omission and unintentional negligence, in accordance with the following conditions:
1. It shall be issued by a company licensed and registered with the Unit, after the Unit has approved its terms.
2. It shall be issued in the name of the actuary.
3. It shall remain valid throughout the term of the licence.
4. The sum insured under the policy shall not be less than (250,000) two hundred and fifty thousand Kuwaiti dinars.
No amendment or change may be made to the policy except with the approval of the Unit.
Licensing and registration procedures in the register of actuaries
Article 244
The application for licensing and registration in the Register of Actuaries shall be submitted through the means approved by the Unit, and shall include the following information, data and documents:
1. A copy of the civil ID card or passport.
2. A certificate stating that the applicant for registration has not previously been sentenced to a penalty for a crime involving dishonour or breach of trust, and an official certificate stating that he has not previously been declared bankrupt, except if he has been rehabilitated.
3. A certified copy of the academic qualifications, practical experience certificates and training course certificates.
4. A true copy of the company’s memorandum of association and articles of association, and of the company’s entry in the Commercial Register.
5. An undertaking that the manager will devote himself full-time to practising the licensed activity.
Any other documents requested by the Unit.
Article 245
The licence application shall be deemed not to have been submitted if the applicant fails, without an acceptable excuse, to submit the documents and information within the period specified by the Unit.
Article 246
The Unit shall decide on the application for licensing and registration in the Register of Actuaries within (30) thirty days from the date of its receipt of the application complete with the data, information and requirements, and in the event of rejection, the decision shall be reasoned.
Article 247
If the licence application is approved, the licensee shall be registered in the Register of Actuaries at the Unit and shall be granted a certificate of his registration stating his name, his address in the State of Kuwait, and the date and number of his registration in the register.
Article 248
The actuary shall commence his work within three months from the date of his registration and of his notification of the registration.
Licence term and renewal
Article 249
The term of the licence shall be three years from the date of its grant, and it shall be renewed upon an application submitted (60) sixty days before the expiry of the term of the licence, on the form prepared for this purpose at the Unit, accompanied by the following:
1. The documents and data required to be submitted upon the issuance of the licence, as set out in this Chapter of these Regulations.
2. Proof of payment of the prescribed fees.
3. Any additional conditions or requirements determined by the Unit.
The Unit may suspend the actuary from practising the activity if the complete renewal application is not submitted.
Article 250
The Unit shall issue its decision on the renewal application within (30) thirty days from the date of its submission complete, after verifying that the actuary continues to comply with the provisions of the Law and these Regulations and has paid the prescribed fees.
Temporary cessation of activity
Article 251
An actuary who wishes to cease practising the activity temporarily, or who is affected by a reason preventing him from practising his activity, shall submit an application for cessation to the Unit, and the period of cessation may not extend beyond three months, renewable for another equal period.
The actuary may not practise his activity during the period of cessation, and in all cases he may apply to resume practising the activity before the end of the specified period if the cessation is voluntary, or after the reasons have ceased to exist.
Permanent cessation of activity
Article 252
An actuary who wishes to cease practising the activity permanently shall submit an application to that effect to the Unit, and shall continue to practise his activity until all the requirements for the revocation of the licence requested by the Unit have been fulfilled, a decision has been issued by the Unit in this regard, all transactions previously assigned to him have been settled, and it has been verified that he has no obligations towards the Unit or towards any entity arising from his practice of his activity.
Cancellation of registration
Article 253
The actuary shall meet all the conditions of licensing and registration on a continuous basis, and registration in the Register of Actuaries shall be deemed a personal registration which he may not, under any circumstances, sell or assign, and in the event of a violation, the registration shall be cancelled from this register by a reasoned decision of the Unit.
If it becomes apparent to the Unit that any of the conditions of licensing and registration is no longer met, it shall issue a reasoned decision striking him off the register.
Functions of actuaries
Article 254
The appointed actuary shall carry out the following core tasks:
1. Preparing the actuarial calculations required by the nature of the company’s business in accordance with internationally recognised actuarial concepts and principles.
2. Assisting the company in designing insurance products and performing the actuarial calculations necessary for pricing such products in accordance with internationally recognised actuarial principles.
3. Studying the company’s business results, analysing them actuarially, and making recommendations on the soundness of the investment policies applied by the company.
4. Studying the company’s financial and technical position, the adequacy of its capital and technical provisions, and the extent to which the solvency requirements are met in the company.
5. Providing advice and counsel on actuarial work.
Engaging actuaries
Article 255
Companies subject to the provisions of the Law and these Regulations may not entrust actuaries who are not registered in the register prepared for that purpose at the Unit with carrying out actuarial work. However, in cases requiring special technical expertise, unregistered experts may be engaged for a specified period after the approval of the Unit.
Article 256
Actuaries may not combine the profession of actuary with any of the other insurance-related professions.
Chapter Five: Insurance Claims Managers
Article 257
Insurance claims management business may not be practised except by a person registered in the register prepared for that purpose at the Unit.
Register of insurance claims managers
Article 258
A register called the (Register of Insurance Claims Managers) shall be prepared at the Unit, in which all insurance claims managers whose registration is approved in accordance with the provisions of these Regulations shall be registered, and the following particulars, and any amendments thereto, shall be entered in the register:
– The name of the insurance claims manager.
– The registration number and date.
– The legal form and amount of capital.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, if any.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other particulars determined by the Unit.
Licensing and registration conditions
Article 259
Subject to the aforementioned Companies Law and Law No. (116) of 2013 on the Promotion of Direct Foreign Investment, the conditions of the licence to practise the business of an insurance claims manager are as follows:
1. The applicant shall be a joint-stock company or a limited liability company in accordance with the provisions of the aforementioned Companies Law.
2. The company’s paid-up capital shall not be less than (500,000) five hundred thousand Kuwaiti dinars, and in all cases the issued capital shall be paid in full upon incorporation.
3. The company’s objectives and purposes shall be limited to insurance claims management business.
4. The company shall comply with internationally recognised professional standards in the field of insurance claims management.
5. The company’s manager shall hold a university degree and have experience in insurance claims management business – according to the company’s field of business – or in any of the other management-related specialisations, for a period of not less than five years.
6. The company shall have a key employee with practical experience in insurance – according to the field – for a period of not less than three years.
7. Companies managing health insurance claims shall contract with at least one physician to verify treatment cases within the limits of cost-effectiveness during the treatment of a beneficiary, provided that such physicians enjoy professional independence and are subject in their opinions only to the medical requirements of their work; they shall have no right to interfere in the health treatment or the treatment of beneficiaries, and the physician may not receive any remuneration or fees for the work assigned to him from any other entity or person other than the company contracting with him.
8. Any other requirements determined by the Unit.
Letter of guarantee and professional liability insurance policy
Article 260
When applying for the issuance or renewal of the licence, the insurance claims management company shall submit a letter of guarantee in favour of the Unit, and an insurance policy covering the professional liability arising from damage resulting from the practice of its activity, unintentional error, omission and unintentional negligence.
Conditions for issuing the letter of guarantee
Article 261
The letter of guarantee shall meet the following conditions:
1. It shall be issued by one of the banks operating in Kuwait in favour of the Unit.
2. The value of the letter of guarantee shall not be less than (50%) of the company’s paid-up capital.
3. It shall be unconditional, unrestricted and payable on demand – by the Unit – and shall not be cancelled except with the approval of the Unit.
4. It shall be issued for the purposes of guaranteeing the settlement of the insurance claims manager’s dealings and the fulfilment of its obligations arising from the practice of its activity towards the parties concerned, or its obligations towards the Unit.
Article 262
The Unit shall have the right to liquidate the letter of guarantee submitted by the insurance claims management company for the reasons set out in Clause (4) of the preceding Article.
Conditions for issuing the professional liability insurance policy
Article 263
The insurance policy shall meet the following conditions:
1. It shall be issued by a company licensed and registered with the Unit, after the Unit’s approval of its terms.
2. It shall be issued in the name of the insurance claims management company.
3. It shall remain in force throughout the term of the licence.
4. The sum insured under the policy shall not be less than (300,000) three hundred thousand Kuwaiti dinars.
No amendment or change may be made to the policy except with the approval of the Unit.
Licence application
Article 264
The application for a licence to practise insurance claims management activity shall be submitted to the Unit on the form prepared for that purpose, accompanied by the following information, particulars and documents:
1. The memorandum of association and the articles of association.
2. The commercial licence of the licence applicant.
3. A certificate showing the name of the partner or partners and the members of the board of directors or the manager.
4. A certificate that the partner or partners and the manager or the members of the board of directors and the chief executive officer have not previously been convicted of a felony punishable by a custodial sentence, or of a crime of bankruptcy by negligence or by fraud, or of a crime involving dishonour or breach of trust.
5. Copies of the model agreements that the insurance claims management company will conclude with the insurance company and the service providers.
6. Submitting an undertaking to fulfil all the required licensing conditions, in the event that the application is approved, within the period determined by the Unit; otherwise, the approval shall be deemed null and void.
7. Paying the fees prescribed in accordance with these Regulations
8. Any other documents or particulars requested by the Unit.
Decision on the licence application
Article 265
The Unit shall issue its decision approving or rejecting the licence application within a period not exceeding (30) thirty days from the date of submission of the application fulfilling all the requirements of the preceding Article.
If the licence application is approved, the company shall be registered in the Register of Insurance Claims Managers at the Unit, and in the event of rejection the decision shall state its reasons.
Licence term
Article 266
The term of the licence shall be three years from the date of its grant, and it shall be renewed upon an application submitted by the company in accordance with the provisions of this Chapter of these Regulations.
Article 267
The licence shall be renewed upon an application submitted to the Unit in accordance with the terms and conditions required for the issuance of the licence, at least two months before the expiry of the term of the licence, provided that the Unit issues its decision on the application within (30) thirty days from the date of its submission in complete form.
Suspension/revocation of the licence
Article 268
The Unit may issue a decision suspending or revoking the company’s licence if the company violates the provisions of the Law, these Regulations, the regulatory decisions or its articles of association, provided that the company is notified of the violation attributed to it so that it may remedy it within (30) thirty days from the date of notification.
Retention of records
Article 269
The insurance claims management company shall keep proper records and books containing all matters relating to its business and to the agreements it concludes with the insurance company and the service providers; they may be organised and kept electronically, and in all cases they shall be kept for a period of not less than five years from the date of expiry of the agreement.
If the agreement concluded between the insurance company and the insurance claims management company ends for any reason whatsoever, the insurance claims management company shall provide the insurance company with all the records and books mentioned in the preceding paragraph in accordance with the provisions of the agreement concluded between them.
Auditor of an insurance claims management company
Article 270
The insurance claims management company shall appoint an auditor registered with the Unit, and it shall submit annual financial statements of the company approved by the auditor, including the volume of operations and the commissions paid by the insurance companies or the service providers with which it deals.
Functions of insurance claims managers
Article 271
The work of the insurance claims manager shall be limited to the following:
1. Settling claims arising from insurance.
2. Paying claims on behalf of the insurance company.
3. Managing insurance programmes approved by the insurance company.
4. Concluding agreements, on behalf of insurance companies, with the service providers designated by the insurance companies.
5. Preparing insurance programmes, provided that it does not market or sell them.
6. Establishing a network of service providers.
Obligations of insurance claims managers
Article 272
The insurance claims management company shall comply with the following:
1. Displaying its registration number at the Unit on all its papers, correspondence and documents relating to its business with the insurance company and with the service providers.
2. Providing the insurance company with the model agreements to be concluded with the service providers before signing them, for approval upon request.
3. Paying the claim amounts to those entitled to them upon receipt from the insurance company, within the period agreed upon in the agreement.
4. Keeping separate book accounts for each insurance company to record the amounts collected from it for the payment of claims.
5. Informing the Unit of any insurance company that delays payment of the value of claims if the delay exceeds (15) fifteen days beyond the period specified in the agreement concluded between them.
6. Providing the contracting insurance company, at any time, with any reports it requests showing the results of its business with it.
7. The insurance claims manager shall separate its own accounts from the accounts of the funds collected from its activity in insurance claims.
8. Opening an account separate from the company’s other accounts for depositing the funds collected from its activity in insurance claims.
Article 273
The insurance claims manager may not carry out the following acts:
1. Selling or marketing insurance policies, or owning, contributing to the capital of or managing any person regarded as a service provider in its field of business, or an insurance company.
2. Concluding contracts to provide services locally with an insurance company that is not licensed to operate within the State of Kuwait.
3. Underwriting any insurance business or ceding any of it to reinsurers.
4. Imposing or collecting from the insured or the beneficiary to whom it provides its services any additional amounts other than those agreed upon with the insurance company under the agreement concluded with it.
5. Retaining any remaining amounts resulting from settling claims at an amount lower than the coverage included in the insurance policies, instead of returning such amounts to the insurance company.
6. Collecting any commission or interest on any amounts held by it in banks for the account of insurance companies, unless otherwise agreed; if the insurance claims management company obtains any financial returns, commission or interest contrary to the agreement concluded, such returns shall become the property of the insurance company.
7. Any other requirements determined by the Unit.
Chapter Six: Insurance Agents
Article 274
Without prejudice to the provisions of Law No. (13) of 2016 Regulating Commercial Agencies, insurance agent business may not be practised except by a person registered in the register prepared for that purpose at the Unit.
Register of insurance agents
Article 275
A register called the (Register of Insurance Agents) shall be prepared at the Unit, in which all insurance agents whose registration is approved in accordance with the provisions of these Regulations shall be registered, and the following particulars, and any amendments thereto, shall be entered in the register:
– The name of the insurance agent.
– The registration number and date.
– The legal form and amount of capital.
– The names, nationalities and shares of the partners.
– The address of its head office and of its branches, if any.
– The name and nationality of the responsible manager and the limits of his powers.
– The number and date of the commercial licence.
– Any other particulars determined by the Unit.
Conditions for registration in the register of insurance agents
Article 276
To obtain an insurance agent licence, the applicant shall be a juristic person taking one of the forms of companies incorporated in Kuwait in accordance with the provisions of the aforementioned Companies Law or Law No. (116) of 2013 on the Promotion of Direct Foreign Investment, the paid-up capital of the insurance agent shall not be less than (150,000) one hundred and fifty thousand Kuwaiti dinars, and its purpose shall be to practise insurance agent business.
Article 277
The company shall have a manager who meets the following conditions:
(a) He shall be full-time and have experience in the field of insurance.
(b) He shall have full legal capacity.
(c) He shall not have previously been convicted of a felony punishable by a custodial sentence, or of a crime of bankruptcy by negligence or by fraud, or of a crime involving dishonour or breach of trust.
(d) Any other conditions determined by the Unit.
Licensing and registration procedures in the register of insurance agents
Article 278
The application for an insurance agent licence shall be submitted to the Unit on the form prepared for that purpose, accompanied by the following information, particulars and documents:
1. The memorandum of association and the articles of association.
2. The commercial licence of the licence applicant.
3. A certificate showing the name of the partner or partners and the members of the board of directors or the manager.
4. A certificate that the partner or partners and the manager or the members of the board of directors and the chief executive officer have not previously been convicted of a felony punishable by a custodial sentence, or of a crime of bankruptcy by negligence or by fraud, or of a crime involving dishonour or breach of trust, unless he has been rehabilitated.
5. A true copy of the authenticated agency contract concluded between the insurance agent and the insurance company or the branch of the foreign company.
6. Paying the fees prescribed in accordance with these Regulations
7. Any other documents or particulars requested by the Unit.
Decision on the licence application
Article 279
The Unit shall issue its decision approving or rejecting the licence application within a period not exceeding (30) thirty days from the date of submission of the application fulfilling all the requirements of the preceding Article.
If the licence application is approved, the company shall be registered in the Register of Insurance Agents at the Unit, and in the event of rejection the decision shall state its reasons.
Licence term
Article 280
The term of the licence shall be three years from the date of its grant, and it shall be renewed upon an application submitted by the company in accordance with the provisions of this Chapter of these Regulations.
Article 281
The licence shall be renewed upon an application submitted to the Unit in accordance with the terms and conditions required for the issuance of the licence, at least two months before the expiry of the term of the licence, provided that the Unit issues its decision on the application within (30) thirty days from the date of its submission in complete form.
Suspension/revocation of the licence
Article 282
The Unit may issue a decision suspending or revoking the company’s licence if the company violates the provisions of the Law, these Regulations, the regulatory decisions or its articles of association, provided that the company is notified of the violation attributed to it so that it may remedy it within (30) thirty days from the date of notification.
Cancellation of registration
Article 283
The insurance agent shall continuously meet all the conditions of licensing and registration. Registration in the Register of Insurance Agents shall be deemed a personal registration which the agent may not, under any circumstances, sell or assign; in the event of violation, the registration shall be cancelled from this register by a reasoned decision of the Unit.
If it becomes evident to the Unit that one of the conditions of licensing and registration is no longer met, it shall issue a reasoned decision striking the agent off the register.
* Replaced by Insurance Regulatory Unit Resolution No. 11 of 2022 (Kuwait Al-Youm, Issue No. 1576, 13 March 2022).
Retention of records
Article 284
The insurance agent shall keep proper records and books containing all matters relating to its business and to the agreements it concludes with the insurance company or the branch of the foreign company; they may be organised and kept electronically, and in all cases they shall be kept for a period of not less than five years from the date on which they cease to be in effect.
Auditor of the insurance agent
Article 285
The insurance agent shall appoint an auditor registered with the Unit, and it shall submit annual financial statements of the company approved by the auditor, including the volume of operations and the commissions paid by the insurance companies or the branches of foreign companies.
Obligations of the insurance agent
Article 286
The insurance agent shall:
1. When practising insurance business as agent of the company or the branch of the foreign company, adhere to the types and classes of insurance set out in the agency contract.
2. Receive insurance applications and issue, amend or cancel insurance policies.
3. Receive insurance premiums.
4. Pay any amounts received under the agency contract to the principal company within the period specified in the agency contract, and pay any amounts received from the principal insurance company or branch of the foreign company for the benefit of the insured or the beneficiaries to those entitled to them without delay.
5. Receive the correspondence exchanged between the company or the branch of the foreign company and the insured and the beneficiaries of insurance policies regarding claims for compensation or otherwise.
6. Settle undisputed claims without obtaining any special consideration therefor, follow up the implementation of settlements with the parties concerned, and exercise the right of recourse against third parties where necessary.
7. Notify the Unit immediately of any change or amendment to the agency agreement concluded between it and the insurance company or the branch of the foreign company.
8. Not be an agent for more than one insurance company or branch of a foreign company except with the approval of the Unit.
9. Ensure that the agency is issued by an insurance company or a branch of a foreign company that is licensed and registered in the Register of Insurance Companies at the Unit to practise insurance business in the State of Kuwait.
10. Not practise any of the other insurance professions.
Branches of the insurance agent
Article 287
The insurance agent may open a branch or branches in accordance with the following conditions and procedures:
1. Submitting an application to the Unit, accompanied by the proposed business plan for the branch to be opened.
2. A period of not less than two years shall have elapsed since its registration in the register, during which it actually practised the business and no disciplinary penalty was imposed on it.
3. The approval of the principal company for opening the branch.
The Unit shall issue a decision approving the opening of the branch or rejecting the application, and a decision of rejection shall state its reasons.
Part Nine: Auditors of Licensed Persons
Article 288
The Unit shall prepare a special register of auditors who carry out review and audit work in accordance with the Law and these Regulations, and the auditor shall be registered in this register after fulfilling the conditions and requirements set out in this Part.
Article 289
Without prejudice to the provisions of Law No. (103) of 2019 on Practising the Profession of Auditing and its Executive Regulations, an auditor wishing to be registered in the special register at the Unit shall meet the following conditions:
1. He shall be registered in the Register of Practising Auditors at the Ministry of Commerce and Industry, and five years shall have elapsed since his registration in that register.
2. The number of employees working in the auditor’s review and audit teams shall not be less than three, provided that all employees in the review and audit teams work full-time for the auditor; the auditor shall be deemed a professional employee where he carries out review and audit work.
3. The proportion of professional employees shall not be less than one third of each team carrying out review and audit work on a given engagement.
4. He shall hold a university qualification in accounting from a university recognised and accredited in Kuwait.
5. A professional employee shall head the auditor’s review and audit team, with commitment to applying International Standard on Quality Control (1), and having regard to the competence and capabilities of the work team, as planned for the various audit engagements.
6. The proportion of Kuwaiti employees working in its review and audit teams shall not be less than 15% upon applying for the registration of an auditor in the special register at the Unit, shall reach 25% within five years, and shall not be less than 50% within ten years from the date of registration at the Unit, provided that it maintains those proportions throughout the period of its registration in the register.
7. The auditor shall have clear policies and procedures for measuring and managing risks and for quality control.
8. The auditor shall have a clear plan for the training and professional development of employees, of not less than thirty hours annually for the members of the review and audit team, provided that it implements the training plan throughout the period of its registration in the register.
9. The auditor shall have a code of professional ethics in line with the latest international practices, such as the Code of Ethics issued by the International Federation of Accountants (IFAC), and all the employees of its review and audit team shall sign and comply with that code; and it shall comply with the rules of ethical conduct of the auditing profession.
Article 290
The auditor shall submit the application for registration in the special register at the Unit on the form approved by the Unit, together with payment of the prescribed fee. The Unit may notify the applicant – to submit any additional information or documents, and if the applicant fails to submit the documents and information within the period specified by the Unit in the notification without an acceptable excuse, the application shall be deemed not to have been submitted.
The Unit shall issue a decision on the application for registration in the Unit’s register within (30) thirty days from the auditor’s submission of the application fulfilling the particulars, information and requirements.
Article 291
The registered auditor shall observe the following:
1. If the auditor is a partner in an entity licensed for insurance activity, he shall comply with the provisions of Article (294) of these Regulations regarding the employees working in his review and audit teams.
2. He shall not provide the client with additional services other than the services required by the auditing profession, and he is generally prohibited from providing services that affect his independence and impartiality, such as consultancy services and internal audit work, while carrying out review and audit work.
Article 292
The auditor shall base the issuance of his report on reasonable grounds in accordance with International Standards on Auditing and the policies and procedures for quality control, as follows:
1. Reviewing the details of his work plan and the results of the review and audit process with the client’s internal audit committee – if any – which shall ensure that he is given the right of full access to all documents necessary to perform the auditor’s tasks.
2. Meeting periodically with the client’s internal audit committee, upon the client’s invitation, before the reviewed interim and annual financial statements are presented to the board of directors for a decision or any recommendations thereon; he or whoever acts on his behalf may meet with the client’s internal audit committee or its board of directors whenever necessary, and the client shall be bound to invite the auditor in this respect.
3. Not carrying out review and audit work for any client for a period exceeding four consecutive financial years unless the client is in liquidation; this period shall be calculated from the date of registration in the Register of Auditors at the Unit, and he may carry out such work for the same client after a break of not less than two consecutive financial years.
4. Informing the body in charge of the management of the client, or the company’s board of directors and the shareholders, of any matters of material importance, within the scope of the review and audit engagement, through the auditor’s report, such as the client’s ability to continue as a going concern.
5. Informing the body in charge of the management of the client or the company’s board of directors of any violations discovered or suspected of non-compliance with the applicable laws, regulations and instructions and the company’s articles of association, or the competent body for that purpose at the client according to its legal system; where there are significant and material violations, the auditor shall also inform the Unit at the same time as informing the body in charge of the management of the client or the company’s board of directors of those violations, and he shall also inform the company’s annual ordinary General Meeting or the competent body for that purpose at the client according to its legal system.
6. Committing to provide all the data and information requested by the Unit.
7. Committing to inform the Unit upon the loss of any of the registration requirements or conditions stipulated in the preceding Articles.
8. Committing not to accept engagements involving a conflict of interest.
9. Committing not to accept engagements that impair the honour of the profession.
10. Committing to inform the Unit immediately upon the issuance of any decision or judgment imposing any penalty, sanction or legal violation against him by any regulatory authority or judicial authority.
Striking the auditor registered with the Unit off the register
Article 293
The Unit shall, by a reasoned decision, strike the auditor registered with the Unit off the register in the following cases:
1. If he is struck off the register of auditors at the Ministry of Commerce and Industry.
2. If a final judgment is rendered against him imposing a felony penalty or for a crime involving dishonour or breach of trust.
3. If any of the conditions for registration in the register of auditors at the Unit set out in Article (294) of these Regulations ceases to be met.
Right of the Unit to file a complaint against the auditor
Article 294
A complaint may, by decision of the Committee, be submitted to the Undersecretary of the Ministry of Commerce and Industry where the auditor violates the aforementioned Insurance Regulation Law or these Regulations, or the Companies Law in respect of companies subject to the Unit’s oversight, in preparation for referring the complaint to the Investigation Committee formed for this purpose.
Part Ten: Violations and Discipline
Chapter One: Disciplinary Board
Formation of the Disciplinary Board
Article 295
A Disciplinary Board shall be established within the Unit by decision of the Committee, composed of three members, chaired by a judge seconded by the Supreme Judicial Council, and two members with experience in insurance, financial, economic and legal affairs. The term of membership of the Disciplinary Board shall be three years, renewable once.
Powers of the Disciplinary Board
Article 296
The Disciplinary Board shall examine and decide on disciplinary proceedings referred to it and brought by the Head of the Unit relating to violations of the provisions of the Law, these Regulations or any decisions or instructions issued pursuant thereto.
Impartiality of members of the Disciplinary Board
Article 297
No member of the Disciplinary Board may, while performing his duties, have any interest, whether direct or indirect, with any entity subject to the provisions of the Law and these Regulations.
Chapter Two: Reports and Their Disposal
Method and conditions of submitting a report
Article 298
A report of the violations set out in the Law shall require that the reporting person have serious evidence justifying his belief in the truth of the reported fact.
Article 299
The report shall be submitted to the Head of the Unit and shall satisfy the following conditions:
1. It shall be in writing and bear the signature, name and capacity of the person submitting it, the date of its submission, his address, his means of contact and his telephone numbers.
2. It shall include a sufficient explanation of the facts of the reported violations, the time and place of their occurrence, the source, manner and occasion through which he came to know of or learn of the reported fact, the names and capacities of the persons reported against, and any other information or evidence supporting the fact.
3. It shall be accompanied by any supporting papers or documents in his possession relating to the reported fact.
4. It shall state his relationship with the person reported against, and whether he has previously submitted a complaint against him to any entity and what action was taken thereon.
Referral of the report to the Legal Affairs Department
Article 300
The Head of the Unit shall refer the report to the Legal Affairs Department to take the necessary action thereon.
Register of reports
Article 301
A special register shall be kept at the Legal Affairs Department of the Unit for recording the reports received that are referred to it. The competent employee shall record the report in minutes, enter its summary and date in the register, and indicate therein the action taken in its respect, whether filing, gathering of evidence or referral to another entity, and the outcome thereof.
Chapter Three: Service on the Person Referred for Investigation
Service on the person referred for investigation
Article 302
The Legal Affairs Department shall serve notice on the person referred for investigation to appear before it to commence the investigation proceedings, at least (7) seven working days before the date set for the investigation. Notice shall be served by fax, e-mail or any other means, in accordance with the forms approved in this regard.
Particulars of service
Article 303
The notice form shall include the following particulars:
1. The date, including the hour, day, month and year.
2. The full name of the person served, his profession or occupation, his domicile and his place of work.
3. The subject of the notice and a summary of the violation attributed to him.
4. The date of the session and its venue.
Time limit for service
Article 304
Notice shall be served during official working days from seven o’clock in the morning until seven o’clock in the evening. The Unit shall have the right to obtain the telephone number, fax number, e-mail address and address of the person served from any entity or person holding such data.
Chapter Four: Investigation of Reports
Article 305
The Legal Affairs Department shall investigate reports and gather information and documents to verify their truth, and shall give its opinion thereon as to filing them, conducting a preliminary investigation into them or recommending their referral to the Disciplinary Board.
Where necessary, reporting persons and witnesses may give their statements using modern means of communication that ensure their confidentiality and safety.
Investigative authority of the Legal Affairs Department
Article 306
The Legal Affairs Department shall conduct the administrative investigation into violations set out in the Law and these Regulations that are referred to it by the Head of the Unit.
For the purpose of exercising his duties and performing his work, the investigator shall have the following powers:
1. The right to request any data, papers or documents from any government entity or any entity concerned with the Unit’s activity.
2. The right to hear the testimony of witnesses.
3. To summon or request the attendance of any person whose statements he deems it necessary to hear.
4. The right to visit and review any record or data held by any government entity or any entity concerned with the Unit’s activity.
Right of defence during the investigation
Article 307
Any person under investigation shall have the full right to defend himself, and may appoint a lawyer to defend him.
Chapter Five: Disciplinary Accountability
Concept of a disciplinary violation
Article 308
Every act that contravenes the provisions of the Law and these Regulations or any rules, decision or instructions issued by the Unit shall be deemed a violation.
Article 309
The submission of a report and the Public Prosecution’s commencement of investigation and institution of criminal action shall not prevent the Unit from exercising its right to pursue disciplinary proceedings, and the Disciplinary Board shall defer deciding on the disciplinary proceedings until the criminal action has been decided. In all cases, the criminal judgment shall be binding on all.
Referral of the violator to the Disciplinary Board
Article 310
Where the investigations reveal evidence of the commission of the violation, the Head of the Unit shall refer the violator to the Disciplinary Board in accordance with the following rules and procedures:
1. The Head of the Unit shall issue a decision referring the violator to the Disciplinary Board, and the relevant papers and investigation minutes shall be attached to the referral decision.
2. The Secretary of the Disciplinary Board shall receive referral decisions and present them to the Chairman of the Board, notify the persons concerned of the dates of the sessions, and carry out whatever the Chairman of the Board assigns to him.
3. The Secretary shall notify the person referred to the Disciplinary Board of the date set for examining the violation attributed to him and of its substance.
4. The notification shall be made at least (3) three working days before the set date, in accordance with the notice mechanism set out in these Regulations.
Safeguards for the person referred to the Disciplinary Board
Article 311
The person referred to the Disciplinary Board or his representative shall be enabled to inspect all papers relating to the violation and shall be provided with a copy of the papers he requests after payment of the fee prescribed in these Regulations, and the Disciplinary Board shall confront the referred person with the violation attributed to him. The Disciplinary Board may hear the testimony of, or seek the expertise of, any person it deems fit, by its own decision or at the request of the referred person or his representative.
Absence of the person referred to the Disciplinary Board
Article 312
The absence of the person referred to the Disciplinary Board, or of the grievant, who has been proven to have been notified of the date, shall not prevent the Disciplinary Board from continuing to examine the violation and issuing a decision thereon.
Chapter Six: Decisions of the Disciplinary Board and Their Enforcement
Penalties imposed by the Disciplinary Board
Article 313
1- The Disciplinary Board may, after verifying the violation, impose any of the following sanctions:
2- Directing the violator to cease committing the violation.
3- Warning.
4- Requiring the violator to retake the qualifying examinations.
5- Suspension from work or from practising the profession for a period not exceeding one year.
6- Permanent suspension from practising the work or the profession.
7- Suspension of the licence for a period not exceeding six months.
8- Revocation of the licence.
9- Imposition of the following restrictions:
(a) Prohibiting the person licensed by the Unit from concluding certain types of transactions.
(b) Prohibiting the person licensed by the Unit from carrying out certain business for a specified period.
(c) Suspension of the licensed activity for a certain period.
(d) Prohibiting the person licensed by the Unit from carrying out certain acts, or suspending or amending his licence.
10- Removal of a board member or manager in any of the companies licensed to carry out insurance activities who has failed to discharge the responsibilities set out in the Law or these Regulations.
11- Imposition of financial penalties graduated according to the gravity of the violation, up to a maximum of fifty thousand Kuwaiti dinars.
In all cases, the Disciplinary Board may require the violator to pay amounts equal to the value of the benefit he obtained or the value of the loss he avoided as a result of committing the violation, and the value may be doubled in the event of repeated violations.
Notification of decisions of the Disciplinary Board
Article 314
The persons concerned shall be notified of all decisions issued by the Disciplinary Board within (7) seven working days from the date of their issuance.
Entry into force of decisions of the Disciplinary Board
Article 315
Decisions of the Disciplinary Board shall be enforceable immediately upon their issuance, unless the decision specifies a date for enforcement. The Head of the Unit shall enforce the decision of the Disciplinary Board.
Enforcement of penalties of the Disciplinary Board
Article 316
Where the decision of the Disciplinary Board imposes financial penalties on the violator, the amount of the financial penalties shall be paid immediately and within the period specified in the decision of the Disciplinary Board, and shall be collected directly by the Unit.
Grievance against decisions of the Disciplinary Board
Article 317
Any person on whom any of the sanctions set out in the Law and these Regulations has been imposed may file a written grievance against it with the Committee within (30) thirty days from the date of being notified of the decision in writing. The Committee’s decision rejecting the grievance shall be deemed final and may be challenged before the competent court. Failure to respond to the grievance within one month from the date of its submission shall be deemed a rejection thereof.
Part Eleven: Resolution and Settlement of Insurance Disputes
Chapter One: Insurance Disputes Arbitration and Settlement Centre
Insurance Disputes Arbitration and Settlement Centre
Article 318
A centre named the “Insurance Disputes Arbitration and Settlement Centre” shall be established within the Unit by decision of the Committee to resolve and settle disputes arising between persons subject to the provisions of the Law.
Article 319
The Insurance Disputes Arbitration and Settlement Centre shall consist of:
1. The General Secretariat, which shall form the body that arbitrates and settles disputes, and prepare the dispute and present it to that body.
2. One or more arbitral tribunals to arbitrate disputes submitted to the Centre.
3. One or more committees for amicable settlement.
4. The Insurance Disputes Arbitration and Settlement Centre shall prepare a roll in which a number of arbitrators are registered, from among whom the arbitral tribunal shall be selected.
Article 320
The Committee shall determine the remuneration of the members of the Insurance Disputes Arbitration and Settlement Centre.
Article 321
The Committee shall determine the fees for arbitration and amicable settlement proceedings for insurance disputes.
Article 322
The Higher Committee shall set the procedures and conditions for registration in the rolls of arbitrators, expert conciliators and mediators at the Unit.
Article 323
The Committee shall determine the arbitrator’s fees in accordance with the schedule of fees approved by the Unit. Such fees shall be deposited with the Insurance Disputes Arbitration and Settlement Centre by the party charged with depositing them, and shall be paid to the arbitrator within (30) thirty days from the date of issuance of the award terminating the dispute and its delivery to the Centre.
Article 324
The Committee shall determine the fees of the members of the Amicable Settlement Committee in accordance with the schedule of fees approved by the Unit. Such fees shall be deposited with the Unit by the party charged with depositing them, and shall be paid to the members within (30) thirty days from the date of the amicable settlement of the dispute and the delivery of the settlement record to the Insurance Disputes Arbitration and Settlement Committee after its ratification.
Chapter Two: Arbitration of Insurance Disputes
Article 325
The arbitral tribunals of the Insurance Disputes Arbitration and Settlement Centre at the Unit may undertake the task of deciding insurance disputes submitted to them, in cases where it is agreed in any insurance policy to resolve the dispute by resorting to arbitration.
Appointment of the arbitral tribunal
Article 326
Where the parties agree that the Unit shall undertake the task of selecting the arbitrator, the presiding arbitrator or the arbitrators, provided that their number is odd, shall be appointed by decision of the Head of the Unit, upon the nomination of the Insurance Disputes Arbitration and Settlement Centre, from among the arbitrators registered in the Centre’s rolls of arbitrators.
Conduct of arbitration proceedings
Article 327
The arbitral tribunal shall carry out its work in accordance with the procedures determined by the Committee and the internal regulations of the Insurance Disputes Arbitration and Settlement Centre.
Chapter Three: Amicable Settlement of Disputes
Article 328
Insurance disputes may be submitted to the Insurance Disputes Arbitration and Settlement Centre with a view to resolving and settling them amicably between the parties through a committee formed for this purpose, and only in cases where disputes arise between companies subject to the provisions of the Law.
Amicable Settlement Committee for Insurance Disputes
Article 329
An Amicable Settlement Committee shall be formed by decision of the Unit, upon the nomination of the Insurance Disputes Arbitration and Settlement Centre, consisting of not more than five and not fewer than three members from among the conciliators and mediators registered in the rolls prepared for this purpose, where a dispute between companies subject to the provisions of the Law is submitted to the Centre.
Jurisdiction of the Amicable Settlement Committee for Insurance Disputes
Article 330
The Amicable Settlement Committee shall have jurisdiction over the amicable settlement of all insurance disputes arising between companies subject to the provisions of the Law, whatever their value, whether of assessed or unassessed value.
Article 331
The following shall fall outside the jurisdiction of the Amicable Settlement Committee for insurance disputes:
1- Summary and interim orders and actions, and precautionary attachment.
2- Disputes brought before the courts before the date on which these Regulations come into force.
3- Disputes subject to an arbitration clause.
4- Criminal actions.
Cases of refusal to consider the insurance dispute
Article 332
The Amicable Settlement Committee shall issue a decision rejecting the insurance dispute referred to it in the following cases:
1- The same dispute has previously been settled by one of the committees.
2- The Amicable Settlement Committee lacks jurisdiction to examine the request for amicable settlement.
3- The requirements for submitting the request for amicable settlement have not been met.
The applicant has no standing or existing or potential interest in the dispute submitted to the Amicable Settlement Committee.
Procedures governing the settlement of insurance disputes
Article 333
The Insurance Disputes Arbitration and Settlement Centre shall receive the request for amicable settlement of the insurance dispute, communicate with the applicant to complete the documents where necessary, and ascertain that the dispute falls within its jurisdiction, within (15) fifteen working days from the date of submission of the request.
Article 334
Upon accepting the request, the Insurance Disputes Arbitration and Settlement Centre shall notify the company concerned of the subject of the dispute and provide it with the documents submitted by the applicant, provided that the company responds within a maximum period of (15) fifteen working days from the date of notification.
Article 335
The Insurance Disputes Arbitration and Settlement Centre shall study the file of the insurance dispute, prepare a report thereon and present it to the Chairman of the Higher Committee, accompanied by a proposal of the names of the members of a committee to settle such dispute amicably, within a maximum period of (15) fifteen working days from the date of receipt of the company’s response.
Article 336
After the issuance of a decision by the Head of the Unit forming the Amicable Settlement Committee, that committee shall communicate with the parties to the insurance dispute to take whatever action it deems appropriate to reach an amicable settlement, through any suitable means for settling such dispute. It may also, with the consent of the parties, communicate with any person whose input it considers to have a role in settling the dispute, and record this in the minutes of the amicable settlement sessions.
Article 337
The Amicable Settlement Committee shall put forward to the parties a proposed settlement record for settling the dispute.
Article 338
The parties shall be notified of the proposed settlement record, provided that they respond to such proposal within the period determined for them by the Amicable Settlement Committee.
Article 339
If a resolution terminating the dispute is reached, the Amicable Settlement Committee shall prepare the settlement record between the two parties, including the agreed terms of settlement. It shall be signed by the parties and ratified by the Amicable Settlement Committee and the Insurance Disputes Arbitration and Settlement Committee, the parties shall be provided with copies thereof, and a copy shall be kept at the Unit.
Article 340
The amicable settlement proceedings shall terminate in any of the following cases:
1. Ratification of the settlement record by the committees.
2. Failure of the parties to respond at any stage of these proceedings and within any of the periods specified therein.
Issued on 16 March 2021 and published in the Official Gazette Kuwait Al-Youm on 21 March 2021.