KUWAIT CITY, Dec 12: The Insurance Regulatory Unit (IRU) has issued the rules for issuing compulsory motor insurance policy for civil liability arising from traffic accident, in accordance with Resolution No.9/2020 that specifies the companies eligible to issue the insurance policy, reports Al-Anba daily. The unit added an approved list will be issued with the data of companies eligible to issue the insurance policy, and this decision will be implemented as of December 13, 2020.
He stressed that insurance documents issued by unqualified companies before the implementation of the decision will be valid, including the rights, obligations and guarantees contained while the insurance company will undertake the administrative and technical work associated with it. It stressed that it’s prohibited to issue, grant or market the insurance policy for the benefit of the insured (the subscriber), unless the company issuing it is qualified under the approved list with any update that occurs thereof.
“To be taken into account are a set of controls and conditions in the commitment of the eligible company issuing the insurance policy in favor of the insured directly or through a broker licensed by the unit amid a written contractual relationship, and it is not permissible to deal with any insurance broker without obtaining prior approval of the unit”.
In its decisions, the unit said the insurance companies are obligated, upon issuing the insurance policy, to conduct their business in accordance with the principles of insurance, especially transparency and good faith, and to provide clear and accurate information to insurance seekers and beneficiaries of the policy.
The qualified insurance company is also obligated not to refrain from receiving any claim submitted to it or issuing any insurance policy except for the benefit of motor vehicles licensed by the competent authority to drive in Kuwait.
The unit said “according to the agreement that Kuwait has ratified regarding the unified insurance card agreement on the movement of cars through the Arab countries (the orange card), the competent authority may authorize one or more Kuwaiti companies qualified as per the approved list to issue an insurance policy in favor of non-Kuwaiti vehicles coming across the borders of Kuwait, provided that the period of insurance coverage for the policy does not exceed one year”.
Regarding the transfer of vehicle ownership, the unit said eligible companies must commit to issuing a new insurance policy for the benefit of the new owner of the vehicle in cases that require the transfer of ownership of a motor vehicle, while the period of insurance coverage should be consistent with the remaining period of the vehicle’s license. The companies eligible to issue the new insurance policy must do the following:
Fix the price of the insurance policy value for one year if the vehicle license period is less than one year. The price of the insurance policy will be fixed for 3 years if the vehicle license period is less than 3 years and more than two years. The insured company must cancel the insurance policy issued for the insured (the previous owner of the vehicle) and return the remaining part of the premium, provided that it is not less than one year.
The insurance company may deduct any administrative fees for cancellation of the insurance policy not exceeding 10 percent of the remaining value of the insurance premium. The unit stressed that the insurance companies or the broker would not accept any money, benefits or gifts from and to the intermediary contracted with them or any person related to them except an approval from the insurance unit is obtained.
The qualifying company must establish contractual arrangements to collect the net value of the insurance policy after deducting the value of commission owed to the broker within a maximum period of 7 days from the date of issuance of the policy, with the commitment of the eligible company, after accepting the grant or collecting a commission for the broker’s issuance or marketing of the insurance policy, and not exceeding 10 percent of the premium value of the insurance policy