The Insurance Authority is considering a meaningful change to how investment returns from mandatory statutory deposits are handled,possibly shifting those funds from the central bank to insurance companies themselves. the proposed amendment to Article 58 of the Cooperative insurance Companies Control System, currently subject to public consultation until January 6, 2026, aims to incentivize the local insurance market and attract foreign investment. This move, officials say, would align the region with international practices and could have a positive impact on company financials.
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The insurance authority is considering a change that would return investment returns from statutory deposits to companies, rather than the central bank. The proposed amendment to Article 58 of the Executive Regulations of the Cooperative Insurance Companies Control System is currently undergoing public consultation until January 6, 2026.
According to the authority, the revision would allow investment returns from statutory deposits to go to insurance and reinsurance companies, instead of being directed to the central bank.
Officials say the change is intended to incentivize companies in the sector and attract foreign investment into the local insurance market, positively impacting company financials and aligning with international practices.
The following table outlines the current and proposed text of the article:
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Article 58 |
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Current Text |
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Proposed Text |
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The statutory deposit ratio must be 10% of paid-up capital, and the central bank may increase this ratio to a maximum of 15% according to the risks facing the company. The company must deposit the statutory deposit amount within 3 months of the date of granting the license in the bank specified by the central bank at the time, and it is invested by the central bank, and its returns go to the central bank. |
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The statutory deposit ratio must be 10% of paid-up capital, and the insurance authority may increase this ratio to a maximum of 15% according to the risks facing the company. The company must deposit the statutory deposit amount within 3 months of the date of granting the license in the bank specified by the authority at the time, and it is invested by the authority, and its returns go to the company. |
The proposed change, currently open for public feedback, could significantly alter how insurance companies manage their investments and potentially boost financial performance. The move underscores the authority’s efforts to modernize the insurance sector and attract greater investment.
