Companies will be aware that they have a number of options from which to obtain their insurance coverage. They will also be aware that, when operating in Qatar, such insurance is required to be procured locally. This article provides a brief overview of the insurance sector in Qatar.

There are two jurisdictions which govern the Qatar insurance sector:

  1. the laws of the State of Qatar (identified as the "State" for the purpose of this article), namely the Decree Law No 1 of 1966 Concerning the Supervision and Control over Insurance Companies and Agents (Insurance Law); and
  2. the rules and regulations of the Qatar Financial Centre, namely Law No 7 of 2005 as amended (QFC Law).

State Law

The Insurance Law governs the insurance market in the State. In particular, the Insurance Law provides the following:

  1. Pursuant to Article 6, any company intending to carry out insurance operations in Qatar must be licensed by the Ministry of Business and Trade (MBT). There is minimum capital requirement for a Qatari insurance company, and for a foreign insurance company, however it is stated in Rupees and in value terms no longer relevant.
  2. In accordance with Article 4, a Qatari insurance company may only take the form of a joint stock company. There is no longer a requirement that this capital be wholly owned by Qatari nationals.
  3. Article 20 states that an insurance agent must be a Qatari national of good standing or a wholly Qatari owned entity.
  4. Pursuant to Article 44, assets and properties within Qatar may only be insured by a Qatar national insurer, ie. an insurance company licensed in Qatar.
  5. The Insurance Law does not recognise insurance "brokers".

In 1971, the Insurance Law was amended such that the issue of new licences to foreign insurance companies was prohibited. This barred any new foreign insurers from being licensed in Qatar.

Article 3 of the Foreign Investment Law provides that foreign investors may only conduct business in the State, including the insurance sector, pursuant to specific circumstances and under approval of the Council of Ministers. Consequently, there are very few insurance companies in the State.  However, it should be noted that Law No 23 of 2008 Allowing Gulf Cooperation Council (GCC) Citizens to Practice New Economic Activities in the State of Qatar permits citizens to practice "insurance services" in the State, although there do not appear to be any GCC insurance providers that provide "insurance services" pursuant to this law and accordingly it is unclear whether such activities may be conducted by these citizens.

There is no legal framework pursuant to which the insurance sector in the State is to be regulated, nor any insurance sector specific conduct of business regulations that apply to insurance businesses operating in the State. Currently, the MBT supervises the commercial companies to which it issues licences. The State insurance sector is lightly regulated by the application of the provisions of various State laws, including the Qatar Civil Code.

The Supreme Council of Health (SCH) recently revealed initial details regarding the introduction of a Social Health Insurance Scheme (SHIS) in the State.  The draft law provides that the government will pay the health insurance premiums for Qatari nationals while employers will be responsible for the premiums of their expatriate employees.  The SHIS will be mandatory for residents and will be linked to the processing and granting of residence permits for expatriates.  The government plans to require all residents and visitors of the State to have insurance coverage by the end of 2014 or early 2015.   

QFC

The QFC has its own legal and regulatory regime. Pursuant to Articles 11 [Licensing of operations] and 18 [Interaction with other laws] of the QFC Law, the regulation of a QFC licensed entity falls outside the jurisdiction of the law of the State. Article 11 (3) permits QFC licensed/ regulated entities to conduct business in the State pursuant to QFC Law and regulations.

In particular, in respect of entities established within the QFC, the QFC Law provides for:

  1. an exemption from the licensing requirements of the State including the MBT, the Qatar Central Bank, the Qatar Commercial Registry, the Qatar Chamber of Commerce and Industry, and the Municipality of Doha;
  2. a statutory guarantee against nationalisation or expropriation;
  3. an entitlement allowing entities that are set up within the QFC to be 100 percent foreign owned;
  4. the ability to repatriate profits and realise investments;
  5. the freedom to recruit and employ staff pursuant to the QFC regulations; and
  6. an exemption from taxation except for those taxes set out in accordance with the QFC Tax Regulations.

The QFC has considerable administrative independence from the State and the effect of the operation of the provisions of the QFC Law is that QFC licensed entities:

  1. do not require any additional license from any other State body; and
  2. are exempt from State law, save for the Immigration Law, the terms of which are reflected in the QFC Immigration guidelines, to the extent that State law regulates the same matters that are regulated by the QFC Law, without qualification or additional requirement.

Accordingly, QFC incorporated entities are entitled to conduct insurance and insurance intermediary business in and from the QFC, free from the constraints of the Insurance Law and the Foreign Investment Law – and in particular, the national ownership requirements stipulated thereunder.

Insurance activities are categorized as "regulated activities" and are accordingly regulated by the QFC Regulatory Authority (QFCRA). The QFCRA has issued rule books prescribing a comprehensive regulatory framework for insurance operations in or from the QFC and in particular:

  1. QFC established entities are entitled to conduct insurance activities in the State, with the QFCRA acting as an independent regulator;
  2. appropriately authorised QFC entities are entitled to provide insurance services to retail customers in the State in accordance with the QFC regulations; and
  3. insurance intermediaries are permitted to offer the products of unregulated insurers to retail customers in the QFC and the State.

In addition to conventional insurance activities, the QFC also permits reinsurance, captive insurance, and captive insurance management.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.