MoCI tightens control over insurance sector
KUWAIT CITY, April 22: According to informed sources the Central Bank of Kuwait (CBK) has asked the banks about the possibility of being a member of the board of directors of the joint banking services ‘KNET’, and identified four main alternatives in this regard, reports Al-Rai daily.
Sources added that the Central Bank’s entry into the KNET board is to be an equal contributor with the remaining 11 members, or by a larger share, or by a minority stake, and finally to get membership without owning any of the company’s shares, in which case the CBK shall be an independent member. The committee explained that this can be achieved through amending the text of the company’s Stautes.
The legislator, in accordance with the Commercial Companies Law, has approved the amendment of the Statute for KNET, indicating that the CBK has asked about its membership in the company’s Articles of Association, without prior approval. The committee concluded that it is difficult to achieve this because there is an obstacle in the Companies Law that prevents the company from achieving this. In an attempt to restructure the insurance sector, where some units are involved in irregularities and accusations, the Ministry of Commerce and Industry (MoCI) has tightened control over this sector by issuing new instructions, reports Al-Rai daily.
In this regard, the daily has learned that the Undersecretary of the Ministry, Abdullah Al-Afasi, has issued a circular stipulating that no General Assembly shall be held for any insurance company until after the Insurance Department has been informed of the dates and agenda so that any observations or objections can be taken note of. The circular pointed out that the Insurance Department should be notified of any change or emergency modification regarding the form of the company or its board of directors or capital. The management of the concerned companies must inform the Insurance Department of these changes or amendments immediately and submit related documents without any delay.
On the other hand, Al-Afasi has issued another circular not to approve requests to amend or change the contracts of the insurance companies unless after careful examination and after seeking the opinion of the Insurance Department provided supporting documents are submitted to the ministry. This circular comes within the framework of the insurance companies’ governance, and the positive implications for monitoring and controlling and guaranteeing the stability of the insurance market to protect the rights of insurance policy holders.