President has ratified the Insurance Act (Act No: 13/2025) on August 28, 2025. Passed by the parliament on August 18, 2025, during the 26th sitting of the second parliamentary term, the Act establishes a comprehensive legal and regulatory framework to govern the insurance industry. This new law aims to ensure the safe and effective provision of insurance services, promoting transparency, accountability, and stability.
Key Provisions of the New Legislation
The Insurance Act addresses several critical areas, creating a robust structure for the industry’s operation and oversight. One of the primary goals is to provide a clear legal foundation for licensing and regulation within the sector. The Act outlines detailed requirements for companies and intermediaries to obtain and maintain their licenses, ensuring that only qualified and compliant entities can operate. This framework is essential for protecting consumers and maintaining a healthy market.
A central theme of the Act is its focus on supervision and oversight. It establishes regulatory provisions to ensure the proper management and operation of insurance businesses. This includes strict guidelines on corporate governance, defining how the management of insurance companies should be structured and the principles under which they must operate. The goal is to promote sound financial practices and ethical conduct across the industry.
The Act also mandates rigorous operational standards, requiring companies to adhere to specific rules regarding their conduct, record-keeping, and reporting. It specifies requirements for audits, inspections, and financial supervision, which will enable authorities to monitor the sector closely and identify potential risks early.
Promoting Market Integrity and Dispute Resolution
To enhance market integrity and protect consumers, the Insurance Act includes specific provisions on market conduct. These rules are designed to ensure fair practices and transparency in the dealings between insurance companies, intermediaries, and customers. Furthermore, the Act establishes clear dispute resolution mechanisms, providing a formal and structured way to resolve conflicts within the sector. This is a crucial step toward building public trust and confidence in the insurance industry.
In special circumstances, the Act also provides guidelines for the appointment of administrators and outlines the regulatory measures to be taken to ensure stability. This proactive approach allows for effective intervention in cases of financial distress or misconduct, safeguarding the interests of all stakeholders.
The new legislation has now been published in the Government Gazette and has officially come into force. It is expected to create a more secure and reliable environment for insurance services in the Maldives, encouraging growth while ensuring the protection of consumers. The ratification of this Act is a testament to the government’s commitment to modernizing the nation’s financial landscape and bringing it in line with international best practices.