Insurance in Kuwait sits on two layers of law. Law No. 125 of 2019 on the Regulation of Insurance, in force since 1 September 2019, created the Insurance Regulatory Unit (IRU), set the licensing regime and gave the regulator disciplinary powers. The contract itself is still governed by Articles 773 to 809 of the Civil Code (Decree-Law No. 67 of 1980), which fix when a policy exists, what the insured must disclose, when the insurer must pay and when a claim expires. This article reads both layers in practical terms and records the IRU measures of 2025 and 2026.
The Law and the regulator (Articles 1 to 6, 90 and 91)
Law No. 125 of 2019 replaced the old Insurance Companies and Agents Law No. 24 of 1961, which Article 91 repeals. Article 2 places under the new law insurers and reinsurers, takaful companies, local insurance pools, branches of foreign insurers, insurance and reinsurance brokers, and the insurance professions that the executive regulations name. Article 5 creates the IRU under the supervision of the Minister of Commerce and Industry, with financial and administrative independence, and Article 6 sets its objectives as fair, transparent and competitive regulation and development of the sector.
Article 90 required the IRU to prepare executive regulations, which have been amended several times. In 2026 Resolution No. 37 amended Articles 179, 183, 193 and 200, and the parts we read concern the capital, guarantees and branches of insurance brokers, with licensed entities given ninety days from Gazette publication to adjust. Our standing advice is to check current IRU publications for the insurer and class involved rather than rely on a secondary summary.
Which classes are regulated and who may insure (Articles 3, 4, 26 and 59)
Article 3 applies the law to life insurance and capital formation operations, general and property insurance, liability insurance, and any other class the IRU designates, with conditions left to the executive regulations. Article 4 prohibits contracting any of them except through a licensed insurer or a licensed branch of a foreign insurer. Reinsurance is excluded, subject to controls in the executive regulations. A Kuwaiti business that buys liability or property cover from an unlicensed carrier therefore buys outside the statutory perimeter.
Under Article 26 an insurer may operate only after commercial registration and an IRU license, which is renewed every three years on an application filed at least three months before expiry, and the IRU keeps a register of licensed companies. That register is the first check we run. Under Article 59 a foreign insurer's branch needs IRU approval for its authorized manager, who issues policies, pays claims, represents the company before the courts and receives notices addressed to it.
Conventional and takaful cover (Articles 1, 2 and 22)
The law treats conventional and takaful insurance as separate contract types. Article 1(6) defines the conventional policy as a contract in which the insurer, for a premium, compensates covered losses or pays the sum insured. Article 1(7) defines the takaful policy as a contract built on solidarity among participants who bear one another's risks under the company's articles and the policy conditions. Article 1(10) counts participants as policyholders, so both groups fall within the law's protections.
Article 22 requires the IRU's Higher Committee to form an advisory Shari'ah supervisory committee of at least five non-full-time members, a majority of them Shari'ah specialists, appointed for two years renewable once. It is the reference for IRU decisions on Shari'ah-compliant activity. When we review a takaful policy we read the participants' account provisions with the policy conditions and confirm the issuer is licensed for takaful.
When a policy exists and which clauses bind (Civil Code, Articles 773 to 789)
Article 773 defines insurance as a contract by which the insurer pays a sum or other financial compensation if the insured event occurs, in return for a premium. Article 776 makes property and liability insurance void without a legitimate economic interest, and Article 777 does so if the risk had already disappeared or occurred. Under Article 779 an application alone does not bind: the contract is normally complete when the insurer signs the policy and delivers it, and the application and its declarations then form part of the contract. The contract is complete even before the policy is delivered if the insurer, in response to the application, delivers a provisional cover note that sets out the essential rules and each party's obligations. An insured who presents a receipt for part payment of the premium may prove by any means that the contract was concluded, even without a cover note.
The Civil Code also protects the insured against hidden wording. Article 780 gives thirty days from receipt to ask for correction of conditions that do not match the agreement, after which they are treated as accepted. Article 782 allows nullity, forfeiture and arbitration conditions to be invoked only if they are displayed prominently. Article 783 disregards a forfeiture clause for late notice or late documents where the delay had an acceptable excuse, and Article 784 voids a general exclusion of unlawful acts unless specific.
Disclosure, increased risk and unpaid premiums (Articles 790 to 798)
Article 790 obliges the insured to state at signing every known circumstance the insurer would want in order to assess the risk, especially facts covered by specific written questions, to report increases in risk promptly (not in life insurance), to pay the premium when due and to report any event that may make the insured liable. Under Article 791, silence or an inaccurate statement that changes the nature or lessens the importance of the risk makes the contract voidable at the insurer's request. If the truth emerges before a loss, annulment may be sought ten days after a registered letter unless the insured accepts a proportionate premium increase.
If it emerges after a loss, Article 791 reduces the sum insured in the proportion that the premium paid bears to the premium that a correct declaration would have produced. Article 792 lets the insurer end the contract for increased risk unless the insured accepts a higher premium, but not where the insurer, knowing of it, kept collecting premiums or paid a claim. On default, Article 797 requires a registered-letter demand, and Article 798 suspends the cover thirty days after that demand. Any agreement waiving the demand or shortening these periods is void.
Claims, payment deadline and the three-year limit (Articles 799 to 801, 807 and 808)
Article 799 requires the insurer to pay the sum due within thirty days from the day the claimant supplies the data and documents needed to verify the right. Article 800 limits indemnity in damage insurance to the loss actually suffered and never above the sum insured. Article 801 subrogates the insurer, to the extent it paid, to the insured's claims against the person legally responsible, except relatives living with the insured or persons for whom the insured is liable. If the insured makes subrogation impossible, the insurer is released in whole or in part, so a claim file must preserve every recourse.
Article 807 extinguishes claims arising from the insurance contract three years from the event that gave rise to them. Where risk details were concealed or misstated, it runs only from the day the insurer learned of it, and for the insured event only from the day the interested persons learned of it. Where the insured's claim against the insurer arises from a third party's recourse against the insured, it runs only from the day the third party sues the insured or receives compensation from him. Article 808 voids agreements that depart from the chapter unless they favor the insured, and the limitation period can be neither lengthened nor shortened.
Compulsory policies, QR codes and payment rules (IRU Resolution 19 of 2025 and 2026 measures)
In August 2025 the IRU announced Resolution No. 19 of 2025 on the rules for issuing compulsory insurance policies in Kuwait, covering all compulsory classes except motor third-party insurance. It requires an acknowledgment in the general conditions that the insured has read the terms, exclusions and limits, a QR code carrying the policy data, the cancellation cases, the refund formula and a clear premium calculation. The QR system applies 180 days after publication in the Official Gazette. Resolution No. 28 of 2025 amended it, and IRU circulars in 2026 address compliance and minimum QR data.
On 29 April 2026 the IRU announced a decision banning cash dealings in insurance operations for every entity it supervises, so that payment and collection run only through electronic and banking channels approved by the Central Bank of Kuwait. Individual policies issued at border points for non-Kuwaiti vehicles are excepted. For motor third-party cover, the IRU's guidance states that insurers may not charge administrative fees on a compulsory claim and that, if the policy has expired, the driver and the owner who allowed the driving are personally liable.
A suspended or revoked insurer (Articles 52 to 58, 30 and 39)
Article 52 lets the IRU stop an insurer from writing new business on listed grounds, among them failure to hold the funds required by Article 35, refusal to carry out a final court judgment, late settlement of obligations and shortfalls in the statutory deposit under Articles 30 and 32. Article 53 requires notice and up to thirty days to correct the breach, then a reasoned decision stating the suspension period and published in the Gazette. Article 54 bars new, renewed or extended policies during suspension, yet policies and endorsements issued earlier stay in force with their rights, obligations and guarantees.
Article 55 lets the Higher Committee revoke a license by reasoned decision, including for refusing final judgments, bankruptcy, repeated suspension within two years or failure to cure. Article 58 then bars new policies and renewals, but the insurer keeps performing earlier policies, and the IRU may require their transfer within six months of notice. Article 39 gives policyholders and beneficiaries a privilege over the assets held under Article 35, ranking after the privilege in Article 1074(a) of the Civil Code. The IRU's own guidance adds that suspension does not excuse payment of claims.
Portfolio transfers and a change in the insured asset (Articles 48 and 49; Civil Code Articles 802 to 806)
Article 48 allows an insurer, with IRU approval, to transfer all or some of its policies, with their rights and obligations, to another licensed insurer. The application is published in the Official Gazette and two daily newspapers, and invites policyholders to object within thirty days of Gazette publication. Under Article 49 the IRU approves only where the rights of policyholders, beneficiaries and creditors are not prejudiced, an objection suspends the transfer until it is resolved, and the IRU may approve against a bank guarantee covering the objector's claim.
The Civil Code adds rules for a change on the insured side. Under Article 802 the rights and obligations pass to the buyer of the insured asset or to the heirs of a deceased insured, and either side may terminate within thirty days of notice. Under Article 804 the transferor stays liable for premiums that have already fallen due, and is released from future premiums from the date the insurer is notified of the transfer by registered letter. Under Article 806 cover continues for the creditors if the insured is declared bankrupt, and either party may terminate within three months. Do not change claim contacts or premium instructions before the transfer decision is confirmed.
Complaints and challenges to IRU decisions (Law Articles 19, 20, 80 to 86; Executive Regulations Articles 50 to 61)
Article 19 of the law creates a complaints committee at the IRU, and any interested person may complain of an error by a licensee. Under Article 52 of the executive regulations any interested person may file, the complaint is recorded and shown to the complainant through the IRU website window (Article 53), and the committee examines it after the complainant escalates it (Article 54). The committee reports its recommendation to the head of the IRU, who decides or archives the complaint (Article 57).
The IRU's guidance says the complainant and insurer first discuss the matter, and the complainant may escalate after fourteen days. As far as we have found, a complaint does not stop the three-year period in Article 807. Article 85 of the law lets the disciplinary board impose financial penalties of up to KWD 50,000 among other sanctions, and Article 86 gives thirty days for a written grievance to the Higher Committee. For IRU decisions, Article 20 sets a grievance committee that decides within seven working days of a filing made within thirty working days.
Brokers, loss adjusters, arbitration and penalties (Articles 63 to 77 and 88)
Article 63 permits insurance broking only through a licensed company incorporated under the Companies Law, with a full-time Kuwaiti manager experienced in insurance. Article 67 prohibits brokers from collecting any amount beyond the premium fixed by the insurer, from representing policyholders in settling their claims, and from giving insurance consultancy beyond their broking contracts. Articles 70 to 73 require registration of loss adjusters, consultants and actuaries.
Article 74 punishes practicing as a risk assessor, loss adjuster, insurance consultant or actuary without registration with up to one year's imprisonment and a fine of KWD 10,000 to 20,000, or either penalty, and Article 75 applies the same penalty to fraudulent false statements to the IRU. Article 77 doubles penalties for a repeat within three years. Where a policy contains an arbitration clause, Article 88 permits the parties to agree that the IRU appoints the umpire, and disputes between regulated companies may be referred to the IRU for amicable settlement.
What we review in a Kuwait insurance policy, renewal or claim
When we review a Kuwait policy, we begin with the insurer's license and class on the IRU register, then test the schedule, exclusions and endorsements against Articles 780 to 784 of the Civil Code. We check the proposal form and declarations against Articles 790 and 791 before a loss makes them decisive. On a claim we build the chronology, check the Article 799 payment clock and the Article 807 limitation date, preserve recourse under Article 801 and choose between the IRU complaint route, arbitration and court proceedings. For a distressed insurer we apply Articles 54, 58 and 39.
See also: our Kuwait company formation guide and our Kuwait labor law guide, plus our commercial and corporate practice.
Frequently asked questions
Can a Kuwaiti company insure its property with an unlicensed foreign insurer?
Not safely. Article 4 of Law No. 125 of 2019 prohibits contracting the insurance activities in Article 3 except through a licensed insurer or a licensed foreign insurer's branch, with reinsurance excepted under the executive regulations.
How long does an insurer have to pay a claim?
Under Article 799 of the Civil Code it must pay within thirty days of the day the claimant supplies the data and documents needed to verify the right, so the complete file and its date of delivery matter.
How long do I have to sue the insurer?
Article 807 of the Civil Code sets three years from the event giving rise to the claim, with the exceptions for concealed risk details, discovery of the event and third-party recourse, and Article 808 forbids shortening or extending that period.
Is my policy canceled if the insurer is suspended?
No. Under Article 54 of Law No. 125 of 2019 policies and endorsements issued before the suspension stay in force with their rights and obligations, although the insurer may not issue, renew or extend policies during the suspension.
Can a late-notice clause defeat my claim?
Not if the delay had an acceptable excuse. Article 783 of the Civil Code disregards a forfeiture clause for late reporting of the incident to the authorities or late documents when the circumstances show an acceptable excuse.
Where do I complain about an insurer's refusal or delay?
Article 19 of the law and Articles 52 to 54 of the executive regulations provide for complaints to the IRU, which are filed and escalated through its electronic system, and the IRU's guidance allows escalation if the matter is unresolved after fourteen days.
Can my broker negotiate my claim with the insurer for me?
Under Article 67 of the law an insurance broker may not represent policyholders in settling their claims, so the claim is presented by the insured or by counsel, with the broker's role limited to its broking contract.
Do you advise on insurance disputes and policy review in Kuwait?
Yes. We review policies, advise on claims and limitation dates, act in IRU complaints and grievances and prepare arbitration and court proceedings. Please reach us through our contact page to discuss your situation.