MMA issues new insurance regulations requiring MVR 2m security deposit

Two key regulations have been formulated to implement the Maldives Insurance Act.

The central bank, Maldives Monetary Authority (MMA), has formulated two regulations: the Risks in Insurance Regulation and the General Articles of Insurance Regulation.

The two regulations were opened for public comment on the 14th of this month and officially published on the 27th.

Under the new regulations, every insurance company operating in the Maldives is required to maintain a security deposit of MVR 2 million.

The Risk Regulation primarily sets out how insurance risks located in the Maldives are to be determined, and the conditions under which exemptions may be granted from the requirement to obtain insurance coverage from a licensed insurer operating in the country.

It also specifies the circumstances in which the Authority may grant such exemptions.

The regulation identifies five categories of risk, including risks to immovable and movable property within the territory of the Maldives, risks relating to residents, risks relating to property and liabilities arising within the country, and risks relating to businesses registered under Maldivian law.

It further outlines the requirements for obtaining and negotiating an insurance policy from a non-licensed foreign insurer for the purpose of covering such risks.

The General Articles of Insurance Regulation sets out the areas in which persons legally authorised to solicit insurance business in the Maldives may operate, as well as the information required when applying for an insurance broker’s licence. It also establishes the procedures for taking administrative action under the Act.

In addition, the regulation specifies the requirements for issuing licences to conduct insurance business, the requirements for licensing branches and subsidiaries of insurers, and the criteria to be followed when establishing security deposits and insurance funds.