Guideline on Prudential Requirements for Insurance Undertakings

Guideline on Prudential Requirements for Insurance Undertakings 2010 All insurance undertakings authorized to conduct insurance in the Maldives are hereby informed of the new requirements on minimum capital and security deposit, under the Insurance Industry Regulations. These new requirements are issued in order to provide additional security for the policy holders and to promote public confidence on the industry. Minimum Required Capital

1. The required minimum paid up capital (or assigned capital, if it is a branch of a foreign insurance company), has been increased to 10,000,000 Rufiyaa for each type of insurance business (life or general insurance business) the undertaking is authorized to engage in. Deposits by Authorized Insurance Undertakings

2. All authorized insurance undertaking, whether life or general insurance shall at all times maintain a deposit of 2,000,000 Rufiyaa with Maldives Monetary Authority (the Authority), for each type of insurance (life or general insurance) the undertaking is authorized to engage in.

3. All deposits placed with the Authority for this purpose will be remunerated.

4. A deposit made in respect of any type of insurance business shall be retained by the Authority until either i. the insurer ceases to be authorized in respect of that type of insurance business; or ii. the deposit is required in the winding up of the affairs of the insurer.

5. If the insurer ceases to be authorized in respect of any type of insurance business, the deposit or part thereof may be further retained for the purpose of settling any outstanding claim against the company. All authorized insurance undertakings must take necessary steps to conform to the new requirement before September 1, 2010.