The Maldives parliament on Wednesday passed a bill imposing fines of up to MVR 5 million on businesses operating in the insurance sector without a licence. The bill was approved with the support of all members.

The bill was submitted by the Government with the objective of maintaining standards in the insurance industry. 

According to the bill, once ratified by the President, the legislation will establish practices designed to ensure safe and reliable operations across the insurance sector. The provisions aim to safeguard policyholders, enhance industry oversight, encourage fair competition, and contribute to economic development.

Implementation of the Insurance Act will fall under the Maldives Monetary Authority (MMA), which will be responsible for regulating and supervising insurance businesses and intermediaries. From the time the bill becomes law, insurance operations may only be carried out under a licence issued by the MMA.

The legislation grants the MMA the power to impose fines ranging from MVR 100,000 to MVR 5 million on individuals or businesses engaged in unlicensed activities. It also prohibits attempts to obtain benefits through unverified information or to assist others in securing such benefits. Offences of this nature may be penalised with fines within the same range, depending on their severity.

The bill also outlines enforcement measures available to the MMA if an insurance company or related party violates the law. These include directing a business to cease certain activities, imposing conditions on its continued operation, restricting or suspending profit distribution to shareholders, and requiring the deposit of specified sums for a defined period.

Further actions include the removal of board members, fines of up to MVR 1 million, and daily penalties of up to MVR 100,000 until compliance is achieved. In severe cases, MMA may cancel an insurance company’s licence altogether.