Maldives Parliament on Monday unanimously passed a new law which will impose harsh penalties on unlicensed insurance providers in the country.
The bill was proposed by the government to maintain the quality of the insurance sector, streamline the regulatory framework of the insurance sector while protecting the rights of insurance policyholders, enhance the sector and encourage a competitive environment.
The objective of the Act is also to ensure that the insurance sector in the Maldives provides insurance services in line with the needs of the public and facilitates and contributes to the economic development of the island nation.
The bill states that the country’s central bank, Maldives Monetary Authority (MMA) will oversee the administration and enforcement of the Insurance Act, tasked with the regulation and supervision of insurance providers and intermediaries.
Once the bill is signed into law, insurance providers would require an insurance license from the MMA to operate in the Maldives or face a fine between USD 6,485 and USD 324,254 for violations.
MMA has the power to impose a similar fine along with several other harsh penalties for providing falsified information or aiding and abetting an attempt to gain unfair advantages.
MMA has the power to impose the following penalties for violations:
Ordering the party to cease a particular activity
Setting certain conditions for future business activities
Prohibition or limitation of dividends to shareholders
Withhold funds for a specified period
Order the removal of the Chairman of the Board of Directors or any other member of the Board.
A fine not exceeding USD 324,254
A fine not exceeding USD 6,485for each day until the violation is corrected or the required actions are taken