Insurance Act No. 13/2025

Act No. 13/2025

Insurance Act

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Office of the President of the Republic
Male', Republic of Maldives
Phone: 3336211
Mobile: 7242885
Website: www.mv.gov.gazette
Volume: 54 Number: 148 Date: 5 Rabi' al-Awwal 1447 – 28 August 2025

Preamble

On Monday, 18 August 2025, the 20th Parliament of the Maldives, in its 26th session of the second session of the year 2025, passed the "Bill on Insurance".

In accordance with Article 92 of the Constitution, the President of the Republic, on Tuesday, 28 August 2025 (5 Rabi' al-Awwal 1447), assented to this Bill, which is hereby published in the Government Gazette today as an Act of the Republic of Maldives.

Volume: 54 Number: 148 Government Gazette of the Republic of Maldives

Act No. 13/2025
Insurance Act

Table of Contents

First Chapter
Preliminary

1. Definitions and Interpretation .................................................................................................................... 8
2. Objectives ................................................................................................................................................ 8
3. Enforcement of the Act ................................................................................................................................ 9

Second Chapter
General Provisions Relating to Carrying on Insurance Business
4. Types of Insurance Business Regulated ...................................................................................................... 9
5. Prohibited Acts ......................................................................................................................................... 10

Third Chapter
Regulations on Carrying on Insurance Business
6. General Conditions for Issuance of License to Carry on Insurance Business ............................................ 13
7. Submission of Application for License ........................................................................................................ 14
8. Application Fee ........................................................................................................................................ 15
9. Issuance or Refusal of License for Application Submitted ........................................................................ 16
10. Conditions of License .............................................................................................................................. 18
11. Suspension and Cancellation of License .................................................................................................. 21
12. Register of Insurance Companies ............................................................................................................ 23
13. Establishment of Branches and Subsidiaries ............................................................................................ 23
14. Reinsurance Business .............................................................................................................................. 23

Fourth Chapter
Management of Insurance Companies
15. Board of Directors ................................................................................................................................... 24
16. Executive Officers of the Company .......................................................................................................... 26
17. Qualifications for Persons Appointed to Offices ......................................................................................... 27
18. Major Shareholders of Insurance Companies .......................................................................................... 27

Fifth Chapter
Procedures for Carrying on Business in a Prudent and Secure Manner
19. Capital .................................................................................................................................................... 28
20. Solvency Margin ...................................................................................................................................... 30
21. Security Deposit ..................................................................................................................................... 30
22. Establishment of Fund ............................................................................................................................. 31
23. Segregation of Funds of Shareholders and Policyholders ........................................................................ 32
24. Investment of Assets ............................................................................................................................... 32
25. Protection of Assets ................................................................................................................................ 32
26. Reinsurance Arrangements ...................................................................................................................... 33
27. Prohibited Acts by Insurance Companies ................................................................................................. 34
28. Alteration and Amendment ..................................................................................................................... 35
29. Investment by Companies ...................................................................................................................... 36

Sixth Chapter
Procedures and Conditions in Providing Insurance Services
30. Benefits under Long-Term Insurance Policies ......................................................................................... 37
31. Subrogation ............................................................................................................................................ 38
32. Determination of Premium Rates .............................................................................................................. 39
33. Liquidated Damages ................................................................................................................................ 39
34. Sale of Additional Products .................................................................................................................... 39
35. Acquisition Costs ................................................................................................................................... 40
36. Confidentiality ....................................................................................................................................... 40
37. Exceptions to Confidentiality .................................................................................................................. 42

Seventh Chapter
Insurance Intermediaries
38. Insurance Agents .................................................................................................................................... 44
39. General Conditions for Issuance of License for Insurance Brokerage ....................................................... 45
40. Regulations on Insurance Brokerage License .......................................................................................... 46
41. Standalone Insurance Contracts with Insurance Companies ................................................................... 48
42. Major Shareholders of Insurance Brokers ............................................................................................... 48
43. Register of Insurance Brokers Holding Licenses ..................................................................................... 49
44. Regulations and Guidelines on Insurance Intermediaries ........................................................................ 49

Eighth Chapter
Maintenance of Records and Submission of Reports
45. Maintenance of Records ......................................................................................................................... 50
46. Submission of Reports and Information .................................................................................................... 52
47. Publication of Financial Statements ......................................................................................................... 52

Ninth Chapter
Audit, Inspection, and Review of Financial Position
48. Audit ...................................................................................................................................................... 52
49. Special Audit ......................................................................................................................................... 56
50. Removal of Auditor .................................................................................................................................. 57
51. Appointment of Auditors for Insurance Agents ......................................................................................... 57
52. Appointment of Actuary .......................................................................................................................... 58
53. Confidentiality of Auditors, Actuaries, and Employees of Parties ............................................................ 60
54. Review of Financial Position .................................................................................................................... 60
55. Inspection .............................................................................................................................................. 60

Tenth Chapter
Market Conduct and Dispute Resolution
56. Regulations on Market Conduct .............................................................................................................. 62
57. Prohibition of Unfair Conditions in Insurance Policies by Specific Insurance Companies ....................... 63
58. Establishment of Dispute Resolution Committee ..................................................................................... 63
59. Responsibilities and Powers of the Dispute Resolution Committee ......................................................... 65
60. Implementation of Decisions of the Dispute Resolution Committee ....................................................... 66

Eleventh Chapter
Control and Appointment of Administrator
61. Decisions on Taking Control and Appointment of Administrator ........................................................... 67
62. Appointment of Administrator ................................................................................................................ 68
63. Consequential Amendments Related to Taking Control and Appointment of Administrator .................... 69
64. Taking Control ....................................................................................................................................... 70
65. Expiry of Period for Taking Control and Expiry of Term of Administrator ............................................. 71
66. Determination of Insurance Company for Winding Up ............................................................................ 71
67. Guidelines for Winding Up Insurance Companies .................................................................................... 72
68. Carrying on Business by Authorized Receiver for Long-Term Insurance Companies .............................. 74
69. Distribution of Assets ............................................................................................................................ 74

Twelfth Chapter
Measures Taken
70. Carrying on Business and Soliciting Business Without License .............................................................. 75
71. Carrying on Insurance Brokerage Without License ................................................................................. 76
72. Imposing Unfair Conditions in Insurance Policies by Specific Insurance Companies ............................. 76
73. Obtaining Unfair Advantage .................................................................................................................... 76
74. Offenses by Insurance Companies, Intermediaries, or Related Parties .................................................... 76
75. Obstruction of Authority in Reviewing Allegations .................................................................................. 79
76. Submission of True Information to Authority ......................................................................................... 80
77. Acts for Which Penalty is Not Specified .................................................................................................. 80
78. Investigation of Criminal Offenses ......................................................................................................... 81

Thirteenth Chapter
Miscellaneous Provisions
79. Continuing Acts ....................................................................................................................................... 81
80. Power to Make Regulations and Guidelines ............................................................................................ 82
81. Fees and Other Charges .......................................................................................................................... 83
82. Legal Protection ...................................................................................................................................... 83
83. Participation in Financial Projects ............................................................................................................ 83
84. Participation in Schemes for Protection of Policyholders .......................................................................... 84
85. Review of Decisions of Authority in Courts .............................................................................................. 84
86. Conflict with Other Laws ....................................................................................................................... 85
87. Commencement of Application of Act ..................................................................................................... 86
88. Interpretation .......................................................................................................................................... 86

Act No. 13/2025
Insurance Act

First Chapter
Preliminary

Definitions and Interpretation

1. (a) This Act establishes the procedures to be followed for the prudent and secure conduct of the insurance business sector in the Republic of Maldives, defines the procedures for licensing entities active in the insurance business, regulates and supervises such entities, and explains procedures related to the insurance business.
   (b) This Act shall be cited as the "Insurance Act".

Objectives
2. The main objectives of this Act are as follows:
(a) To ensure stability in the insurance sector of the Republic of Maldives, establish prudent and secure procedures for conducting insurance business and for entities active in the insurance sector, and monitor the conduct of business; (b) To protect the rights of insurance policyholders; (c) To prepare for and take necessary measures against any adverse events that may affect the insurance sector; (d) To develop the insurance sector and expand competition within it; (e) To define procedures for issuing licenses to carry on insurance business and to act as insurance brokers; (f) To ensure that the insurance sector in the Republic of Maldives serves public interest, provides insurance services, and facilitates economic development in the Republic of Maldives.

Enforcement of the Act
3. (a) The Authority shall enforce this Act.
(b) The Authority shall regulate and supervise insurance businesses and insurance intermediaries.
(c) The Authority shall regulate and supervise businesses and activities within the scope of this Act to ensure stability in the insurance sector. The Authority shall determine which businesses and activities are to be regulated and supervised, and the manner of such regulation and supervision, as specified in this Act. (d) The procedures specified in this Act shall apply to businesses or activities determined for regulation and supervision under paragraph (c) of this Article.

Second Chapter
General Provisions Relating to Carrying on Insurance Business

Types of Insurance Business Regulated
4. (a) For the purposes of this Act, insurance business is divided into General Insurance Business and Long-Term Insurance Business. General Insurance Business includes General Reinsurance Business. Long-Term Insurance Business includes Family Reinsurance Business.
(b) The Authority shall determine and publish the classes of insurance business for each type specified in paragraph (a) of this Article. The Authority may also determine sub-classes within such classes as it deems necessary.

Prohibited Acts
5. (a) It is prohibited for any person other than those holding an insurance business license issued by the Authority to carry on insurance business in the Republic of Maldives, to represent that they are carrying on such business, or to advertise such business. Persons engaging in such activities shall be stopped, and the Authority shall have the power to take measures under this Act.
(b) For the purposes of paragraph (a) of this Article, it is not prohibited for persons holding reinsurance business licenses issued by regulators in other countries to provide reinsurance services to insurance companies. (c) It is prohibited for any person other than an insurance company holding a license issued by the Authority, an insurance broker holding a license issued by the Authority, or an insurance agent of an insurance company holding a license issued by the Authority, to use the word "Insurance" or "Reinsurance" or any word or phrase in the Maldivian language or any other language that implies or suggests such meaning, in the name of their business or in providing services, unless they hold a license from the Authority. (d) It is prohibited for any person other than an insurance broker holding a license issued by the Authority to act as an insurance broker in the Republic of Maldives, or to represent or advertise that they are acting as such. (e) Notwithstanding paragraph (d) of this Article, it is not prohibited for persons holding reinsurance brokerage service licenses issued by regulators in other countries to provide reinsurance brokerage services to insurance companies. (f) Notwithstanding paragraph (d) of this Article, it is not prohibited for persons holding brokerage licenses issued by regulators in other countries, as exempted by the Authority in accordance with regulations made under this Act, to provide brokerage services. (g) It is prohibited for any person other than an insurance broker holding a license issued by the Authority to use the phrase "Insurance Brokerage" or any phrase related to it or implying its meaning, or any word in the Maldivian language or any other language implying such meaning, in the name of their business or in providing services. (h) Notwithstanding the provisions of this Article, it is not prohibited for an insurance company holding a license issued by the Authority to issue insurance policies for the purpose of providing risk coverage for other risks in the Republic of Maldives, as exempted by the Authority in accordance with regulations made under this Act. (i) For the purposes of paragraph (h) of this Article, the risks that may be covered shall be determined and published by the Authority in accordance with regulations made under this Act. The Authority may exempt certain acts under paragraph (h) of this Article, specifying the periods, limits, and conditions for such exemptions in regulations made under this Act. (j) Notwithstanding paragraph (h) of this Article, reinsurance by an insurance company is not prohibited under paragraph (h). (k) It is prohibited for any person other than the specified persons to solicit insurance business in the Republic of Maldives or elsewhere. (1) The specified persons are:

1. Insurance companies holding licenses issued by the Authority;
2. Insurance brokers holding licenses issued by the Authority;
3. Agents of insurance companies holding licenses issued by the Authority;
4. Other persons determined by the Authority in accordance with regulations made under this Act.
   (m) The sector for which the persons specified in paragraph (k) of this Article are authorized to solicit shall be determined by the Authority in accordance with regulations made under this Act. (n) The Authority may determine the persons and businesses exempted from the prohibition in paragraph (k) of this Article, and may specify specific conditions and terms for their compliance, as provided in regulations made under this Act. (o) The Authority may determine other persons or businesses exempted under paragraph (n) of this Article.