Regulating Insurance in Kuwait: A Turning Point

Regulating Insurance in Kuwait: A Turning Point

Insurance activity is extremely significant for business stability as it serves as a tool for risk management by transferring such risks to others. The insurance market has recently witnessed a number of repercussions, including the over-issuance by insurance companies of policies without setting aside adequate financial provisions enabling a commitment to compensation for the insured risks, causing certain insurers to sustain difficulties. Further repercussions include a lack of actuarial experts in the small and medium insurance companies who are in charge of pricing the insurance products and ensuring the composition of the necessary provisions.

In light of the Amiri Decree promulgated on 15 July 2015, the competencies of the Ministry of Commerce & Industry in this area were set to supervise and control insurance companies, agents, and brokers.

Further, the year 2019 witnessed important organizational and regulatory developments that may regulate the insurance market. These reflect the promulgation of the following law and resolutions:

Law No. 125 of 2019, regulating insurance;
Ministerial Resolution No. 215 of 2019, regulating the profession of actuarial expert;
Ministerial Resolution No. 227 of 2019, mandates insurance companies to appoint an actuarial expert for all types of insurance
Ministerial Resolution No. 243 of 2019, appointing a Kuwaiti compliance supervisor;
Ministerial Resolution No. 244 of 2019, regarding the codification of insurance policies.

The emergence of new obligatory functions in the insurance markets

According to the new legislation regulating the insurance activity in the State of Kuwait, insurance companies must appoint a Kuwaiti compliance supervisor, as per the provisions of the Ministerial Resolution No. 243 of 2019. Such function would contribute to ensuring compliance with all legislations, thus fostering risk management within the insurance companies, as well as providing Kuwaitis with new job opportunities.

Also, in accordance with both Ministerial Resolutions Nos. 215 and 227 of 2019, the appointment of an actuarial expert registered with the Ministry of Commerce & Industry, or an audit firm with experience in the insurance business is a mandate. Meanwhile, combining work as an auditor and practicing actuarial business for the same client at the same time cannot take place.

Types of Insurance Companies

In accordance with Article (1) of Law No. 125 of 2019, regulating insurance, the licensed companies include:

  • Insurance companies;
  • Re-insurance companies;
  • Takaful insurance companies;
  • Takaful reinsurance companies;
  • Branches of offshore insurance companies, and
  • Insurance conglomerates and the relevant re-assurance.

Capital Requirements for Insurance Companies

Article (23) of Law No. 125 of 2019, regulating insurance, states:
“Without prejudice to the provisions of the referenced Companies Law, the insurance and reinsurance company shall take the form of a shareholding company. The issued capital shall not be less than:

  1. A company carrying out life insurance: KD 5 million;
  2. A company carrying out general insurance and liability: KD 5 million;
  3. A company carrying out life, general, and liability insurance: KD 10 million;
  4. A company carrying out conventional or Takaful re-insurance activities: KD 15 million.

In all cases, the issued capital must be fully paid up upon incorporation. The minimum issued capital may be increased by resolution from the Unit.

Statistics of Insurance Companies

The State of Kuwait has 39 insurance companies, including 28 national, 11 Arab, and foreign companies. National companies are divided into 16 Takaful and 12 conventional.
(Source: Statements of the Minister of Commerce & Industry on 15 May 2019).

It is worth mentioning that 8 insurance companies are listed in Boursa Kuwait, including 6 conventional and 2 Takaful. These are:

  1. Kuwait Insurance Company;
  2. Gulf Insurance Group;
  3. Ahleya Insurance Company;
  4. Warba Insurance Company;
  5. Kuwait Re-Insurance Company;
  6. Bahrain Kuwait Insurance Company;
  7. Al-Oula Takaful Insurance Company, and
  8. Wethaq Takaful Insurance Company.

It should be noted that the oil sector required listing in Boursa Kuwait as a condition to deal with insurance companies.

Statistics of the Size of the Insurance Market

In respect of the insurance market in the State of Kuwait, the Minister of Commerce & Industry stated that the size of insurance companies over the past three years amounted to KD 9 billion in 2016, KD 11.6 billion in 2017, and 13.1 billion in 2018.
Source: Statements of the Minister of Commerce & Industry dated 15 May 2019.

Kuwait Insurance Federation (KIF)

KIF was initiated in the State of Kuwait on 26 June 2006. Members include insurance companies. KIF aims at sponsoring and regulating the interests of the members, defending their rights, and represent them in all matters relating to their common affairs.


Legislations promulgated in 2019 are not the end of the story in supervising the insurance market in the State of Kuwait. Yet, these represent a significant step, certainly to be followed by subsequent legislation that would upgrade the performance of insurance companies in Kuwait to cope with the regulatory developments at the regional and global levels.

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