Kuwait – Informed sources have suggested that the Insurance Regulatory Unit and some companies in the creditor sector will request the opening of bankruptcy proceedings against four insurance companies, in order to guarantee the rights of creditors, policyholders and shareholders, noting that the bankruptcy of insurance companies could be subject to an increase, reports Al-Qabas daily.
The sources said that, in accordance with the IRU and bankruptcy laws, implementing regulations and amendments, each of the supervisory authorities represented by the unit and the creditors of the company – insurance companies of creditors and others – have the right to request the initiation of settlement proceedings, preventive restructuring or declaration of bankruptcy.
The sources said that the decision issued by the unit at the end of last week regulated the method of calculating the minimum value of the application for the initiation of settlement proceedings, preventive restructuring or declaration of bankruptcy in the market. insurance.
The decision stipulates that the minimum order of opening of procedures for preventive settlement, restructuring or bankruptcy of insurance and/or reinsurance companies is calculated according to two equations:
1 – Equity value (according to the latest interim review or annual audited financial statements submitted to the unit or in the event of a change therein) x Fixed ratio (equal to 5%)
2 – The value of paid-up capital (according to the last audited or audited annual financial statements submitted to the unit or whenever there is a change in it) X a fixed percentage (equal to 5%) Sources have pointed out that the companies expected to file for bankruptcy have in recent years slashed the prices of insurance policies and refrained from implementing court orders to compensate policyholders.
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