Insurance Law approved in Kuwait

The Kuwait National Assembly recently approved a new insurance law amid calls by MPs that the insurance sector must come under the Central Bank or continues under the Commerce and Industry Ministry.

Commerce and Industry minister Khaled Al-Roudhan said that Kuwait badly needs a new insurance law especially that the existing legislation was issued some 60 years ago and it was amended for the last time in 1981. He said the existing law does not include supervisory tools and the new one has tackled all the negative aspects in the insurance sector, adding that Kuwait was the first Gulf state to regulate its insurance sector but is the last to implement latest developments.

The minister said that 39 insurance companies are operating in the country, 28 of them are Kuwaiti and the rest are foreign. Together, the insurance companies are dealing with around KWD13 billion. MP Saleh Ashour called for the insurance sector to be under the supervision of the Central Bank and opposed the proposal to establish an independent body for the insurance sector.

Ashour said the new law increases the capital of insurance companies to between KWD5-15 million which will impact existing companies. MP Safa Al-Hashem criticised insurance companies and said that the new law favours the companies at the expense of the insured. MP Abdullah Al-Kundari said the law does not provide sufficient protection for those insured and encourages monopoly for some companies besides that it does not encourage competition.

MP Saadoun Hammad said that the law does not require foreign companies to comply with the capital requirements as the Kuwaiti insurance companies and called for imposing the law on foreign companies wishing to open in Kuwait. At the end of the debate, 34 lawmakers voted for the law against 13. The second reading will be debated following the introduction of several changes.