Article 1 The attached law on insurance companies and agents is hereby put into effect.

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1 August 31, LAW No. 24 OF 1961 (1) ON INSURANCE COMPANIES AND AGENTS Acting upon the recommendation of the President of Finance and Economy and after the approval of the Supreme Council, WE, ABDULLAH AL- SALEM AL- SABAH, AMIR OF KUWAIT do hereby sanction the following Law: Article 1 The attached law on insurance companies and agents is hereby put into effect. Article 2 Insurance companies and agents operating in Kuwait are allowed a period of one year to comply with the provisions of this Law. Article 3 The President of Finance and Economy shall issue the necessary orders for the implementation of this Law. Article 4 The President of Finance and Economy shall implement this Law which shall come into effect as of the day of its publication in the Official Gazette. ABDULLAH AL- SALEM AL- SABAH Amir of Kuwait CHAPTER I General Definitions Unless otherwise established by presumption, the following expressions shall have the meanings indicated against each one of them:- 1- President: The President of Finance and Economy. 2- Insurance Controller: The Insurance controller, or his assistant who is appointed by the President of Finance and Economy and the Insurance Controller in the Department of Finance and Economy. 3- Insurance Agents: Any person or corporate body who is granted a license by the President to act as an insurance agent in accordance with the provisions of Chapter V of this Law. 4 - Insurance Policyholder: designates the person who has originally acquired the policy rights or the person to whom such rights have been irrevocably assigned but not an assignee whose rights therein are held subject to a condition indicating that such rights are not absolutely vested in him. 5- Licensed Insurance Assessor: a person whom the President authorizes, as an expert in this field, and in accordance with terms and conditions specified in a special regulation, to assess indemnities and make estimations in the settlement of claims arising in connection with insurance policies and the liabilities assumed there under. 6- Actuary: the person licensed by the President to practice actuarial activities in accordance with terms and conditions specified in a special regulation.

2 7- Auditor: the licensed accountant who is accepted in accordance with terms and conditions specified in a special regulation. 8- Corporations Law: the Law on Commercial Corporations No. 15 of 1960 or any superseding law. 9- Office: the place set up by the insurer to facilitate his business and solicit customers but shall not have the right to issue insurance policies. 10- Bank: Any Kuwaiti bank or foreign bank which has a branch in Kuwait, appointed by the President to hold deposits in trust. 11- License: the license to practice insurance issued by the President in accordance with the provisions of this Law. 12- The year: the Gregorian calendar year. CHAPTER II Types of Insurance Article 2 For the purposes of this Law, the types of insurance shall be as follows: 1- Life Insurance: comprises insurance on human lives and premium insurance including disability and old age insurances. 2- Fire Insurance: include insurance against damage caused by fire, earthquakes, thunderstorms, hurricanes, winds, tornadoes, domestic explosions and damage caused by crashes of aircrafts and other airships and all risks which are customarily included under fire insurance. 3- Accident Insurance: includes insurance against loss or injury arising from personal accidents, labor accidents, theft, embezzlement, car accidents, tort liability and all risks which arecustomarily included under accident insurance. 4- Marine Insurance includes insurance against damage to ships and cargoes or any other insurable risks pertaining to ships or their cargo, goods, personal effects or property, whether transported by land sea or air or any other means. It also includes warehousing hazards or any incidental hazards encountered during transportation as well as all risks which are customarily included under marine insurance. 5- Capital Insurance: includes insurance which assures the payment to a person of one or more sums of money in the future in consideration of one or more payments to the insurer, but does not include life and premium insurances. 6- Other types of insurance: include all other types of insurance not mentioned elsewhere in this article such as life annuity agreements known as Tontine. CHAPTER III Insurance Companies Article 3 This Law applies to all insurance companies whether Kuwaiti or foreign. Article 4 (amended by Law No. 13 of 1962) Only joint-stock companies are authorized to carry out insurance operations and, in the case of

3 Kuwaiti companies, their capital must be permanently owned by Kuwaitis. However, foreign insurance companies, nationalized or established in another form permitted by the laws of their country, may be authorized by order of the Minister of Finance and Economy to carry out insurance operations provided it is established that such companies had carried out insurance operations prior to the issuance of Law No. 24 of 1961 referred to above. Article 5 The paid- up capital of a Kuwaiti insurance company shall not be less than one hundred and fifty thousand Kuwaiti Dinars and that of a foreign insurance company not less than the equivalent of two hundred and twenty five thousand Kuwaiti Dinars. Article 6 The company shall not be licensed to practice insurance operations until all registration procedures shall have been completed in accordance with the provisions of the (Corporations Law. Article 7 (amended by Law No. 13 of 1962) Every insurance company shall deposit in a Kuwaiti bank or in a Kuwaiti branch of a foreign bank a deposit as a guarantee towards the fulfillment of its obligations amounting to:- a- Forty five thousand Kuwaiti Dinars in respect of life insurance, capital insurance and premium insurance or any one type thereof. b- Thirty thousand Kuwaiti Dinars in respect of each other type of insurance with an overall maximum of one hundred and twenty thousand Kuwaiti Dinars other than the amount provided under section (a) of this article. Subject to the approval of the Minister of Finance and Economy, the deposit shall be in cash money or its equivalent in shares issued by Kuwaiti companies, debentures issued by Kuwaiti companies or public organizations, real estate mortgages or a bank guarantee issued by a recognized bank. Article 8 Deposits shall be placed with the bank in the name of the company and to the order of the President. In case a mortgage on real estate is submitted as deposit, it shall be registered in the Land Register in the name of the President after the value of the mortgage property has been appraised by not less than three experts in accordance with the method decided upon by the President. Estimation expenses shall be borne by the company. The amount accepted as deposit shall not exceed 60% (sixty percent) of the appraised value of the property. Article 9 Deposits shall not be disposed of without the written permission of the President or his nominee. However, the competent court and the execution authorities may attach the deposit, directly and without the President's approval, for debts resulting from the company's insurance operations but not for other debts. Article 10

4 The Insurance Controller shall require that deposits be restored to their statutory level in case their value has dropped as a result of a decrease in the value of stocks, bonds and real estate or for any other reason. Should any serious damage occur to real property, the property shall be reassessed at company's expense and the company shall be required in accordance with the provisions of Article 8 of this Law, to settle the difference within a period not exceeding sixty days from the date it is summoned to do so. Article 11 Whenever a deposit is totally or partly attached by any court or execution authority according to the provisions of Article 9 of this Law, the company shall make up any deficit to the extent of the amount attached. The Insurance Controller shall require the company to do so. Article 12 Subject to the President's approval, the deposit may be substituted in full or in part by any other kind of deposit mentioned in Article 7 of this Law provided that the value of the latter is not less than that of the statutory deposit at the time of substitution. Article 13 The bank shall have no right to dispose of the deposit in any manner except upon a final judgment or written permission from the President when the latter is convinced that the depositor has no financial liabilities relating to its insurance operations in Kuwait and after publishing a notice to this effect in the Official Gazette, provided that a period of not less than three months shall have elapsed between the date of the notice and that of the permission to dispose. Likewise, the Land Registry Bureau shall have no right to cancel the mortgage inscription in respect of the deposited property except by a written order from the President. Article 14 Subject to prior written approval of the President, the bank may invest a cash deposit with the consent of the depositing company and for its account. Any interest and dividends earned on shares or bonds so invested shall be collected by the bank and credited to the company's account Article 15 The company shall notify the Insurance Controller of any shortage occurring in the value of a non- cash deposit within a period not exceeding seven days from the date of its occurrence. The Insurance Controller is entitled at any time to ask the bank which holds such non- cash deposit to supply him with detailed information thereon. CHAPTER IV Branches of Insurance Companies Article 16 In accordance with the provisions of Article 3 of this Law, branches of foreign insurance companies operating in Kuwait before the

5 promulgation of this Law shall remain in operation and shall carry on the insurance activities which they were licensed to perform. Article 17 Foreign insurance companies which apply for the establishment of branches in Kuwait after the date of enactment of this Law shall require the approval of the Supreme Council before practicing insurance operations in Kuwait as set forth under Article 49 of this Law. Article 18 The applicant for a license to establish a branch of a foreign insurance company shall submit together with his application a statement of the company's insurance operations for the three preceding years and the balance sheet of the preceding year in addition to the information relating to the registration of company branches in accordance with the provisions of the Corporations Law. These documents shall be translated into Arabic and duly authenticated. Article 19 The branch of an insurance company shall be managed by a manager duly authorized by his company to act on its behalf. Should the manager be replaced by another, the Insurance Controller must be notified. Article 20 Should a foreign insurance company with a branch in Kuwait wish to establish another branch for itself, it should submit an application therefore to the Insurance Controller without the need of submitting the information provided under Article 18 of this Law. The Insurance Controller shall submit the matter to the President before approving such application. Article 21 The President, or whoever acts on his behalf, is entitled to ask any company which has a branch in Kuwait for any additional information he may deem necessary. Article An insurance company established in Kuwait may open for itself one or more branches in Kuwait subject to notifying the Insurance Controller within one month from the date of establishing such branch or branches. 2- The head- office of the company shall be held responsible for the operations of all its branches in Kuwait and for the submission of all information pertaining thereto. CHAPTER V Insurance Agents Article 23 An insurance agent shall fulfill the following requirements:- 1- To be a Kuwaiti national of at least ten years standing who has completed twenty one years of age, of good conduct and behavior, not

6 convicted of any felony or misdemeanor that is dishonorable or affecting public morals and not declared bankrupt unless rehabilitated. He also has to be registered in the Chamber of Commerce and the Commercial Register; or 2- To be a company established in Kuwait, provided that not less than 51% of its capital is owned by Kuwaitis. In the case of a partnership, all conditions that are required from an individual agent shall also be fulfilled by all the partners. Article 24 An insurance agent shall hold a special Power of Attorney from an insurance company which fulfills the requirements provided for under this Law. The power of Attorney shall in particular include the power to:- 1- represent the insurance company before the courts, the President and all other official and non- official bodies; 2- receive warnings, notices and communications addressed to the company by the courts, the President or any other authority; 3- provide the President with all information required according to the provisions of this Law or any other law; 4- indemnify losses resulting from the occurrence of risks covered by insurance policies sold by him or behalf of the company. CHAPTER VI Insurance License Article 25 Every insurance: company or branch thereof shall obtain a license from the President to perform insurance operations in Kuwait and may not exercise such activities before obtaining the said license. The registration of the insurance company in the commercial register does not in itself tantamount to a license for the exercise of insurance operations. Article 26 The application for an insurance license shall be submitted to the President through the Insurance Controller supported by the following documents: 1- An authenticated certificate showing the paid- up capital. 2- A statement showing the types of insurance which the company or its branch wishes to write in Kuwait. The President or whoever acts on his behalf shall have the right to ask for authenticated copies of balance sheets and insurance policies. 3- An authenticated document showing the name and address of the branch manager and the authority empowering him to manage the branch and sign insurance policies on behalf of the company. Article After the submission of the required documents for obtaining the insurance license, the Insurance Controller shall, within a period not exceeding one month from the date of submission of the application, submit a report to the President indicating that all fees were duly collected and whether the requirements for granting the license were fulfilled or not. 2- The President shall, within a period of one month from the date of- receiving the said report, approve or reject- the granting- of the insurance license to the company and his decision, whether in the approval or in the rejection, shall be final.

7 3- The President shall issue the license to exercise insurance operations in the name of the company with mention of the agent's name. Article 28 The insurance license shall be renewed annually upon payment of the required fees provided the application for renewal is submitted and the fees paid one month before the expiry of the license in each year. Article 29 The President may suspend the insurance license granted under this Law for any period he deems fit provided such period does not exceed one year. He may also cancel it in the following cases:- 1- If the licensee violates the provisions of this Law or the Corporations Law or any other law. 2- If the licensee refuses to abide by a legally enforceable judgment. 3- If the financial standing of the company is effected in such a way as to necessitate the increase of its deposit due to a decrease in its value and the licensee abstains from making- up the shortage within the period prescribed under Article 10 of this Law. 4- If it is revealed that the licensed insurance company has obtained a decision for its voluntary or judiciary liquidation or its agent has been declared bankrupt or if it is revealed to the President that the company has lost more than half of its capital or has- absolutely ceased its activities. 5- If the licensee no longer fulfills any of the requirements provided for under this Law. Article 30 When a license is either suspended or cancelled, the President's decision shall be notified to the company through the Insurance Controller and shall specify the reasons that warranted the decision taken and the duration and effective date of such suspension or cancellation. Article 31 When a license is either suspended or cancelled, the insurer shall have no right to issue new insurance policies. However, all rights and obligations pertaining to insurance policies which are issued prior to such suspension or cancellation shall continue to be effective as if the company were still carrying out its insurance operations. Article 32 If a license is cancelled in accordance with the provisions of Article 29 of this Law, the parties concerned may, six months after the date of such cancellation, submit 3n application to the President through the Insurance Controller requesting the reinstatement of the license. Such application shall be supported by documents which prove the termination of the cause or causes of cancellation. Should the President reject such application, he should state the reasons that made him do so within a period of one month from the date the application was submitted.

8 Article 33 Should the President refuse to reinstate the license under the provisions of the preceding article, and in the event of the insurer being a company or a branch thereof and the said company or branch has not already taken a decision to liquidate itself, the Insurance Controller shall then require the court to liquidate only the insurance operations of the said company or branch. Article 34 When a license is suspended for a determined period in accordance with the provisions of the preceding articles, the Insurance Controller shall on the expiry of the suspension period and the disappearance of the reasons which had motivated such suspension, reinstate the license to the company. Article 35 When a license is either suspended or cancelled by the President, the Insurance Controller shall publish such decision in the Official Gazette and notify all banks, chambers of commerce and insurance associations, if any. CHAPTER VII Records Article 36 Whenever an insurer carries out various types of insurance operations, he shall keep approved records of accounts for each type independently and shall deliver receipts carrying serial numbers. Article 37 The insurer shall keep a special record for insurance policies issued by him showing the name of the insured, the beneficiary and the premiums collected and another record for life insurance applications submitted to him showing the date of the application, the name of the applicant and the action taken in connection therewith. Article The Insurance Controller shall keep a record of the names and addresses of insurance companies and their agents, the type of deposit, the date it was deposited, its value and the bank in which it was deposited, if such deposit was in the form of securities or, otherwise, the Land Registration Bureau, if the deposit was in the form of a real estate mortgage. He shall also mention in the record the type of insurance written, the date the license was obtained and any changes in the information on record and shall mark those companies which have ceased their activities or those whose registration have been cancelled. 2- The Insurance Controller shall publish in the Official Gazette, at least once a year, the names of insurance companies operating in Kuwait for their own account as well as the names of their agents and authorized managers. CHAPTER VIII Information

9 Article 39 The company shall submit the following:- 1- an annual balance sheet certified by an auditor in respect of each type of insurance to be submitted to the Insurance Controller; 2- a report on the insurance operations carried out by the company during the year as per the form prescribed by the Insurance Controller; 3- companies selling life insurance, premium insurance or capital insurance shall arrange to have, at least once every three years, a comprehensive valuation of their assets and liabilities carried out by an actuary and shall submit to the Insurance Controller a certified copy of such report within six months from the date of completion of such valuation. Article 40 The report on insurance operations and supporting statements of accounts, the balance sheet and company records must be conform to the facts and shall be signed by the Chairman of the Board of Directors and an authorized signatory member or by the branch manager in case the insurer is a branch of a foreign company or its agent. The insurance agent shall sign on behalf of the insurer and, if the foreign company's agent is a Kuwaiti company, then the person authorized by resolution of the Board of Directors shall sign on its behalf. Article The Insurance Controller shall require the correction or completion- of the information contained in any document, statement or report submitted by the insurer, if he suspects its accuracy. 2- The insurer may ask the Insurance Controller to amend any document, statement or report submitted by him to the Controller in case such error was due to a misprint, oversight or was unintentional. The Insurance Controller may ask for whatever evidence he deems necessary to satisfy himself before effecting such amendment. However, if in spite of the evidence submitted he shall refuse to do so, the insurer shall have the right to object to the President and shall state in the objection the facts and the request for amendment supported by the necessary evidence. The President shall, in a decision stating the reasons therefore, order to effect, or reject the correction and take whatever action he deems adequate. Article 42 Acting upon a report from the Insurance Controller, the President may appoint an actuary, an auditor or any licensed accountant to audit the company's operations and submit a report thereon. Such auditing fees shall be borne by the company. The President may, if he deems it necessary, publish the auditor's report in the Official Gazette. CHAPTER IX General Provisions Article Every insurance association in Kuwait, if any, which comprises members licensed to perform insurance operations in accordance with the provisions of this Law, shall keep a special record of the minutes of its meetings and provide the Insurance Controller with a

10 copy of all its resolutions and minutes of its meetings signed by the president of the association. 2- The association referred to in the preceding paragraph shall dismiss from among its members any insurer whose license shall have been cancelled by decision of the President in accordance with the provisions of this Law. 3- Should the association avail itself of private information, about an insurer, calculated to prejudice the rights of either third parties or the public interest, it should notify the Insurance Controller accordingly. Article 44 If two or more companies, governed by the provisions of this Law, wish to merge so as to form one company, the President shall so combine their licenses upon their submitting, each one on its own, reports certified by an auditor, a licensed accountant or an actuary showing that such merger does not prejudice the rights of insurance policy holders or the rights of third parties in general. Article Once approved by the President, the merger shall be announced in the Official Gazette one month prior to the issue of the license. Any person who considers himself prejudiced by this merger, shall have the right to object to the Insurance Controller who shall arrange for a settlement between the parties concerned. In case a satisfactory settlement is not reached, the objecting party shall have the right to resort to court, within one month from the date of publication of the settlement procedure, in order to prevent such merger. The court shall give a final decision on the case and send a copy of its decision to the Insurance Controller for registration. 2 - Should a company governed by the provision of this Law, wish to transfer all its operations in Kuwait to another company also governed by the provisions of this Law in Kuwait, the provisions of the preceding paragraph shall apply. Article 46 The President shall decide the suitable time to issue a special regulation regulating the insurance assessors' profession and another regulation setting forth the terms under which actuaries shall be accepted. Article The President shall form an Advisory Insurance Committee, under his chairmanship or that of his deputy, consisting of not more than five members selected among persons of experience in insurance matters and including the Insurance Controller and a representative of the Kuwaiti Reinsurance Company, if any. The resolutions of such committee shall be of an advisory nature and shall be passed by absolute majority. 2- The President may ask the committee to give its opinion on certain matters relating to insurance and the committee shall have the right to contact the Insurance Controller, insured persons, government departments and others concerned in order to have them express their views in writing. Article 48

11 Within the requirements of the economic interests of Kuwait, the President may require:- 1- Life and capital insurance companies to keep in Kuwait the full mathematical reserves on policies concluded in Kuwait. The President may, after consulting the advisory insurance committee, reduce the percentage of such to be so kept to not less than 40%. 2- Insurance companies dealing with marine insurance and any other operations connected therewith, to retain funds in Kuwait amounting to not less than 15% of the gross premiums collected during the preceding year. 3- Insurance companies dealing with other types of insurance, to retain funds in Kuwait amounting to not less than 30% of the gross total of premiums collected during the preceding year. 4 - In case the above requirements are put into effect, companies operating in Kuwait shall be allowed a delay of not less than one year in order to increase their funds to the level of the stated percentages. The President may extend the said delay once or more provided that such extensions shall not exceed one year at a time. 5- The President shall designate the banks that may accept cash deposits and securities as part of the reserves. Priority shall be given here to Kuwaiti banks. Article 49 No new insurance licenses shall be granted to foreign insurance companies for a period of five years from the date this Law is issued and published in the Official Gazette. On the expiry of the said period, the President shall have the right to issue licenses to foreign insurance companies or to extend this prohibition for a further period upon the recommendation of the Advisory Insurance Committee. Article 50 No person shall be allowed to insure directly, outside Kuwait, any real estate or property existing in Kuwait. Article 51 All papers, documents and statements submitted in accordance with the provisions of this Law, shall be duly translated into Arabic and authenticated. Article 52 All fees due under this Law shall be calculated according to a schedule to be issued by order of the President. Article 53 Any insurer whose license has been suspended or cancelled and pursues his activities after such suspension or cancellation, shall be liable to imprisonment for a period not exceeding six months and a fine not exceeding nine hundred Kuwaiti Dinars or to either penalty.