A Chapter From - Regional Practical Guidance - Insurance - Kuwait
Transport & Insurance Focus
Ahmed RezeikSenior Counsel, Head of Shipping - Kuwait (Consultant)
Passant MansourAssociate, Transport & Insurance
The following article sets out sample questions and responses that form part of a regional regulatory guide for the insurance sector across the Middle East. This particular section focuses on Kuwait and provides a snapshot of the regulatory framework governing insurance and reinsurance activities in the jurisdiction. With oversight by the Insurance Regulatory Unit (IRU), Kuwait has introduced a structured regime aimed at enhancing transparency, market fairness, and alignment with international best practices. The questions explored here cover key regulatory topics such as licensing, capital requirements, intermediary oversight, dispute resolution mechanisms, and the treatment of foreign branches—offering valuable insights for stakeholders operating in or entering the Kuwaiti insurance market.
What is the name of the main regulator(s) governing insurance in this jurisdiction? The regulator is called Insurance Regulatory Unit “IRU”. The IRU is an independent IRU with a board consisting of a chairman, a deputy head and three part-time members appointed by a resolution of the Minister of Commerce and Industry ( ‘MOCI’) for a one time renewable period of four years, as well as a representative from the Central Bank of Kuwait and a representative from the MCI.
What are the main areas which they regulate?
The IRU’s main objectives are to:
Regulate and control the insurance business in a fair, transparent and competitive way.
Develop the insurance business and its instruments in line with international best practices.
Provide protection to the parties involved in the insurance business.
Apply policies that ensure fairness and transparency and prevent conflict of interests.
Ensure compliance with the laws and regulations related to the insurance business.
Raise public awareness on the insurance business, benefits, risks and obligations related to it and encourage the development of it.
Does Kuwait have any other independent jurisdiction that function separate from the onshore jurisdiction? There is no freezone or offshore in Kuwait.
Kuwait’s insurance sector is governed by a well-defined regulatory framework, with the IRU playing a central role in promoting transparency, compliance, and market development.
Are there any restrictions on the way reinsurance operates in this jurisdiction?Any person may engage in any insurance or reinsurance activity in Kuwait only after obtaining a license from the IRU to engage in the activity. A legal person may obtain one license to practice one or more insurance or reinsurance activities. A register will be created in the IRU for companies licensed to engage in insurance business.
However, as per article 5 of Insurance law Reg. which stated that it is prohibited to contract, in any form whatsoever, for any insurance and Reinsurance activities and the Insurance Professions mentioned in the Law and the present Regulations except through licensed persons registered in the Unit's register according to their activities, subject of the contract, except for “All types of Reinsurance activities, as per the list approved by the Unit”. Therefore, the IRU will issue an approved re-insurance list which would only be accepted as a foreign reinsurance companies, however, this list has not been issued so far.
Are there limits or requirements for outsourcing operations to third-party vendors, particularly for critical functions? There is no limits or requirements, however, practically, we didn’t see any insurance company outsourcing operations to third-party vendors.
How are foreign branches regulated in Kuwait?As per the new insurance law, the IRU also allows foreign insurance companies to establish a branch in Kuwait for their foreign company as an exceptional option to practice insurance in Kuwait. However, this branch should be established through KDIPA with another process and requirements.
What are capital requirements in Kuwait? Their issued capital shall be at least as follows:
Five million Kuwaiti dinars for a company that engages in life insurance and fund accumulation activities, and categories thereof.
Five million Kuwaiti dinars for a company that engages in general and property insurance activities and/or liability insurance activities, and its categories thereof.
Ten million Kuwaiti dinars for a company that engages in a combination of the activities in Items (1) and (2)
Fifteen million Kuwaiti dinars for a company that engages in Reinsurance business of any insurance activities
Is there a statute of limitations on insurance claims? If so, what is it? Actions arising from the insurance policy shall be brought within three years to run from the time of occurrence of the event which gave rise to the action save where the law provides otherwise; the time limitation, however, shall not run:
in the case of concealment of particulars relating to, or of providing incorrect or inaccurate particulars in respect of the risk the object of the insurance except from the day on which the insurer became aware of the same;
in case of occurrence of the event the object of the insurance except from the day on which the interested parties became aware of the occurrence;
when the cause of the insured's case has arisen from recourse exercised against him by a third party except from the day of initiation of the case by such third party, or from the day on which the third party receives the compensation from the insured.
What mechanism do insurance policies usually provide for resolution of coverage disputes?"Insurance policies typically include mechanisms such as negotiation, mediation, arbitration, or court proceedings to resolve coverage disputes. The exact mechanism used often depends on the terms outlined in the policy and the agreement between the insurer and the insured. Arbitration is commonly included in commercial contracts, while court proceedings are generally used when other methods fail.
Kuwait’s insurance sector is governed by a well-defined regulatory framework, with the IRU playing a central role in promoting transparency, compliance, and market development. While the regulatory environment continues to evolve—particularly in areas like reinsurance approvals and foreign branch licensing—navigating the framework can be complex without local insight.
Our insurance lawyers in Kuwait have extensive experience advising on all aspects of insurance and reinsurance regulation, licensing, compliance, and dispute resolution. Whether you are an insurer, reinsurer, intermediary, or investor looking to operate in Kuwait, our team is well-positioned to support your business goals. Please don’t hesitate to reach out to us for tailored legal advice on any insurance-related matter in the jurisdiction.
For further information,please contact Ahmed Rezeik and Passant Mansour.
Published in April 2025
