Kuwait mulls law to regulate, develop insurance industry
Insurance sector plays key role in economy: Official
KUWAIT: Assistant Undersecretary at the Ministry of Commerce and Industry Abdullah Al-Awais revealed a higher committee will study and develop the insurance industry in Kuwait, headed by representatives of the ministry of commerce and with the membership of all sectors and government parties involved. In his speech on behalf of Minister of Commerce and Industry Khaled Al-Roudhan during a conference and meeting of insurance companies at the Sheraton Hotel, Awais said this step will help in developing a bright future for this sector.
“The ministry is currently working on studying and evaluating a number of options, including a draft law regulating the insurance market as one of the proposals of the ministry of commerce and industry, as well as studying other proposals related to establishing an independent body or strengthening the existing administration. All proposals will be subject to discussion and consultation with insurance sector companies,” he said.
Transparency
“We understand and agree with demands that call for the reorganization of the market by setting controls that will help the insurance sector take a transparent approach. This will enable the insurance industry to increase its share of the market, which currently stands at 450 million dinars for all economic, commercial, industrial and investment activities,” Awais said. Awais pointed out that the insurance sector is one of the economically important and pivotal sectors and it should be supported to enhance its progress and organizational advancement towards new and ambitious horizons that suit the aspirations of the next stage, stressing that scientific and objective discussion is the way to monitor, diagnose and identify the requirements for the development of the insurance market. He vowed the minister will keep up with expectations to promote investment in this sector.
Chairman of the organizing committee of the conference Khaled Al-Awadhi said the insurance industry is needed within the structure of the modern economic system and affects the protection of other financial sectors and the economy as a whole, “Regulation of the insurance sector and establishing a higher authority for oversight and governance applications are future challenges,” he said. Awadhi added that the activity of the insurance industry has developed significantly and has become one of the most powerful industries and an important pillar that supports economic activity, where companies, bodies and individuals find insurance as a protective shield and an effective means against risks.
Independent body
“It is no secret that all companies in the insurance sector are in agreement with a fundamental requirement to regulate the market, either by establishing an independent body or issuing a new modern law, or by assigning the sector to the Central Bank of Kuwait,” he added. On the other hand, sector leaders categorically reject the proposals of the sector’s consolidation under the supervision of the Capital Market Authority, which is a competent authority for securities and stock exchanges and insurance expertise, since the Central Bank has deeper and more successful experience.
In his review of the most important challenges facing the industry in the Kuwaiti market, Awadhi said some negatives led to deviation of the industry from its lofty purpose to contribute effectively to the Kuwaiti economy. He added that these shortcomings and negatives are sufficient to accelerate a new modern law that cleans up the market, controls competitiveness and mechanisms of work and protects the rights of all parties.