Insurance Unit Suspends Two Companies for Failing to Rectify Violations

The Insurance Regulation Unit announced the issuance of two orders suspending two insurance companies from conducting insurance activities, based on clauses (3) and (6) of Article (52) of Law No. (125) of 2019 concerning the Regulation of Insurance. This decision was taken due to the companies’ failure to comply with the provisions of the law, its executive regulations, and related decisions, and in order to protect the rights of participants in the insurance market.

The Unit clarified that the suspension orders followed prior warnings issued to the two companies, requiring them to rectify the alleged violations and address their situations within specified deadlines, with a warning that legal measures, including suspension from conducting insurance activities, would be taken in case of non-compliance. However, the two companies failed to rectify these violations within the granted periods, necessitating the issuance of the suspension orders in accordance with the law.

The Unit noted that the two suspended companies are among four insurance companies that had previously received warnings. It reiterated its warning to the two companies whose licenses had been suspended to expedite the rectification of all alleged violations before the expiration of their granted deadlines, to avoid the imposition of legal and supervisory measures, which could lead to the revocation of their licenses to conduct insurance activities.

In this context, Khaled Walid Al-Basili, Director of the Supervision and Oversight Department at the Insurance Regulation Unit, affirmed that the Unit continues to monitor insurance companies’ compliance with the law, its executive regulations, and the issued regulatory decisions. This is achieved by tracking violations and following up on corrective measures taken by the companies. He noted that granting companies deadlines to rectify their violations is intended to provide them with the opportunity to regularize their status and comply with supervisory requirements.

Al-Basili explained that “the two suspension orders reflect the Unit’s seriousness in applying the law and enforcing its supervisory decisions. They confirm that the warnings issued to companies are not merely formal procedures; rather, they are followed by actual legal measures in case violations are not rectified within the specified deadlines.” He emphasized that the Unit would not tolerate any violations that endanger the rights of policyholders and beneficiaries.

Regarding the rights of policyholders and beneficiaries, the Unit affirmed that the suspension of the two companies from conducting insurance activities does not result in the cancellation of existing insurance policies or the lapse of rights and obligations arising therefrom. It stressed that the two companies must continue to fulfill all their legal and contractual obligations toward policyholders, beneficiaries, and contracting parties, including settling due insurance claims and honoring rights arising from existing policies and contracts, in accordance with legal provisions and contractual terms, without prejudice to the scope of the suspension orders.

The Unit concluded by calling on all entities and individuals under its supervision, including insurance companies, insurance brokers, and other licensees, to fully comply with the provisions of Law No. (125) of 2019, its executive regulations, and the regulatory decisions and instructions issued by the Unit. It affirmed that it would not hesitate to apply the law and would not refrain from taking all available legal and supervisory measures against any entity under its supervision that violates prevailing legislation. It emphasized that protecting the rights of policyholders and beneficiaries, and enhancing compliance, transparency, and fairness in the insurance market, remain its top priorities.