Insurance Authority Proposes Shift in Investment Returns for Statutory Deposits
A proposed amendment could redirect investment returns from the central bank to insurance companies, potentially boosting the sector and attracting foreign investment.
the Insurance Authority has put forward a draft amendment to article (Fifty-Eight) of the executive regulations governing cooperative insurance companies. The proposed change concerns the handling of returns on investment related to statutory deposits, and is currently undergoing review on a survey platform until January 6, 2026.
According to a statement released by the authority, the amendment would redirect the returns on investment of these statutory deposits from the central bank to the insurance and/or reinsurance companies themselves. A senior official stated that this shift is intended to “stimulate companies in the sector and foreign companies wishing to invest in the local insurance market,” ultimately strengthening the financial health of these businesses and aligning with established international practices.
Currently, the regulations stipulate that insurance companies must deposit 10% of thier paid-up capital as a statutory deposit. The central bank retains the authority to increase this percentage up to a maximum of 15%,based on the assessed risk profile of each company. The existing framework mandates that the central bank manages the investment of these deposits, with all returns accruing to the central bank.
The proposed text outlines a critically important change: the Insurance Authority would assume responsibility for investing the statutory deposits, and crucially, the resulting returns would be directed back to the insurance companies. The authority would also gain the power to adjust the deposit percentage, mirroring the current authority held by the central bank.
The following table details the current and proposed text of Article Fifty-Eight:
| Current Text | Suggested Text |
|---|---|
| The percentage of the statutory deposit must be 10% of the paid-up capital, and the Central Bank may raise this percentage to a maximum of 15% according to the risks faced by the company.The company must deposit the amount of the statutory deposit within 3 months from the date of granting the license in the bank determined by the Central Bank at the time, and it is invested by the Central Bank, and its returns return to the Central bank. | The percentage of the statutory deposit must be 10% of the paid-up capital, and the Insurance Authority may raise this percentage to a maximum of 15% according to the risks faced by the company. The company must deposit the amount of the statutory deposit within 3 months from the date of granting the license in the bank determined by the Authority at the time. It is invested by the Authority, and its returns return to the company. |
This proposed change represents a notable shift in control and financial benefit within the insurance sector, potentially fostering greater investment and growth. The outcome of the survey, concluding in early 2026, will determine whether this amendment is adopted and implemented.
Why this matters: The Insurance authority believes redirecting investment returns will empower insurance companies, allowing them to reinvest in growth and innovation.Who is involved: The key players are the Insurance Authority,cooperative insurance companies,the central bank,and potential foreign investors. What is changing: The proposed amendment shifts control of statutory deposit investment returns from the central bank to insurance companies. How it happened: The Insurance Authority drafted the amendment and is seeking public feedback through a survey concluding January 6, 2026. the outcome of the survey will determine if the amendment is adopted.
