January 12, 2011
H.E. Fatima Mohammed Ishaq Al Awadi, Deputy Director General
of the Insurance Authority, said: “the new accounting policies, which are
expected to be completed during the first quarter of the present year, restrict
the investments of the insurance companies and determine certain percentages of
the premiums allowed to be invested in the economic sectors. The draft policies
also include determining a certain percentage of the premiums allowed to be
invested by the company in each sector”. She indicated that the draft policies
still need the approval of the Ministry before final approval.
Al Awadi added that the draft policies aim at maintaining
the financial solvency of the insurance companies in a manner to guarantee
maintaining the rights of shareholders and policyholders at the same time. She
indicated that the draft policies will oblige the companies to take technical
provisions and financial reserves that boost their financial solvency.
She indicated that determining a percentage of the premiums
allowed to be invested will spare the companies further losses arising from
investing in the stock and real estate markets and it will drive them to
concentrate on developing their technical operations by expanding the products
and improving the standard of services delivered to the clients.