MVR 5 million fine for insurance without licence
The draft law is to come into force on the date of its approval and publication in the government gazette.
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By
Mohamed Muzayyin Nazim
The government on Monday introduced a bill in parliament that provides for a fine of up to MVR 5 million on those found indulging in insurance business without a licence.
The bill was moved by PNC MP Ahmed Thorig on behalf of the government, as a completely new law.
Reasons for the bill consisting 96 pages and 13 chapters:
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Lay down guidelines to be followed for the operation of insurance business in a robust and safe manner in the country
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Prescribing rules relating to the licensing and regulation and supervision of insurance companies and persons acting as insurance intermediaries
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Establishment of the legal framework for the regulation of the insurance business
According to the bill, the business is divided into two main categories. They are:
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General insurance business; this will include general Takaful business
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Long-term insurance business; these include family Takaful business
The Monetary Authority of Maldives (MMA) is the licensing and regulatory body for insurance business. The bill also prohibits any person from carrying on or pretending to carry on or advertising to carry on insurance business without obtaining a licence from the MMA under the Act. The MMA has been given the power to stop such persons and take action under the law.
If such a thing is done without a licence, the person(s) will be fined in the range of MVR 100,000 to 5 million.
The next offence punishable by a fine of up to MVR 5 million in the penalising chapter is for taking unfair advantage. The bill states it is prohibited for any person to obtain an undue advantage by intentionally giving false information, directly or indirectly, in making an insurance claim and to attempt to obtain such advantage and to assist in obtaining such advantage.
In addition, it is also a criminal offence to be an insurance broker or insurance agent without a licence. The penalty is a fine between MVR 75,000 and MVR 750,000.
The Act is to come into force on the date of its approval and publication in the Government Gazette. At the same time, if a provision of this Act conflicts with a provision of another Act, then this Act shall take precedence.
