Insurance Unit: Halt Issuance of Mandatory Vehicle Insurance Policies in Paper Form

The Insurance Regulation Unit issued a circular to licensed insurance companies authorized to issue civil liability insurance policies arising from traffic accidents (mandatory vehicle insurance), announcing the launch of the pilot phase for the updated Bima electronic system, which is designated for issuing this type of insurance policy. Under the circular, the issuance of such insurance policies via paper-based channels is suspended, and policies will be issued exclusively through the Bima electronic system. Any policy issued outside this channel will not be recognized, as part of the Unit’s efforts to enhance digital transformation and regulate insurance policy issuance procedures.

The Unit also clarified that the updated system allows insurance companies to grant contracted brokerage firms the authority to issue policies in the name of the insurance company, through a sub-user account on the Bima system, while adhering to the controls and procedures specified in the circular. It is worth noting that this measure does not change the channels or procedures for insurance applications for customers, as policyholders can still directly approach insurance companies or brokerage firms to request policy issuance in accordance with established procedures. The change is limited to the mechanism by which insurance companies and brokers issue policies, which will now be issued exclusively through the Bima electronic system.

The Unit emphasized that, during the pilot phase, insurance companies must organize training workshops for their contracted insurance brokers on the system’s usage, documenting the names of trainees to provide to the Unit upon request. The circular also stressed that payment for insurance policies must be made exclusively through electronic payment methods, with cash payments not accepted, thereby supporting procedural integrity and aligning with relevant regulatory decisions.

Hamad Abdullah Tifouni, Acting Director of the Information Systems Department at the Insurance Regulation Unit, stated: “The Insurance Regulation Unit aims to strengthen its oversight of supervised companies by leveraging modern technology to develop regulatory tools and support the digital transformation journey in the insurance sector. This measure helps curb attempts to forge insurance policies or manipulate prices, thereby enhancing the integrity and regulation of policy issuance processes.”

He added: “The Bima electronic system represents a unified, centralized platform for mandatory vehicle insurance policies, facilitating data access, improving the accuracy and quality of statistics derived from the system, and providing more reliable data that supports sector oversight and informed decision-making based on accurate data.”

The development of the Bima electronic system aligns with the Unit’s strategy to build a more efficient and transparent insurance environment grounded in accurate data and modern technology, supporting the evolution of the Kuwaiti insurance market.