Kuwait's Insurance Regulatory Unit (IRU) directed that insurance and reinsurance companies operating in the country obtain a credit rating from an accredited international agency that meets the prescribed minimum standards.
The mandate is set out in IRU Resolution No. 1/2026, published on 15 January. The aim is to strengthen the regulatory framework of the Kuwaiti insurance market, as well as enhance transparency and oversight of the sector, the IRU said.
According to the resolution, a credit rating serves as a key indicator of a company’s financial strength. (Re)Insurers are required to maintain a rating that demonstrates an acceptable capacity to meet financial, credit, administrative, and supervisory requirements, as well as their creditworthiness and ability to fulfil contractual obligations.
Branches of foreign insurance companies operating in Kuwait are also required to submit documentation confirming that their parent companies hold a credit rating from an approved international agency.
The prescribed credit rating minimum standards are:
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Accredited Ratings Agency
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Required minimum rating
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AM Best
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B++
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Moody’s Ratings
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Baa1
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Standard and Poor’s Global Ratings (S&P)
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BBB+
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Fitch Ratings
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BBB+
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The IRU also requires all Kuwaiti insurance and reinsurance companies and branches of foreign companies to submit a copy of their credit classification annually, together with the accompanying analytical report. The report must detail the basis for the classification, analyse the factors influencing it, and outline any additional conditions or requirements asked for by the IRU.
The classification and analysis report are to be submitted in Arabic to the IRU no later than 30 June each year. The rating should cover financial, credit, administrative, and supervisory performance as well as creditworthiness and the ability to meet contractual obligations for the fiscal year ended on 31 December of the previous year.
Governance and transparency
The decision obliges (re)insurance companies and foreign branches to incorporate credit rating considerations in their annual plans relating to governance, risk management, and financial sustainability. These plans must include clear procedures to improve and maintain the required credit rating.
A copy of the plan must be submitted to the IRU along with the company’s or foreign branch’s annual report, for the Unit to monitor its implementation and evaluate its effectiveness. The IRU may request that the plan be updated or amended where deemed necessary to strengthen the financial and credit position of the company.
The IRU also requires that companies and foreign branches publish their credit rating on their official website, in all relevant publications and on issued insurance policies. This disclosure must include the name of the credit rating agency, the date of issuance of the credit rating, and the assigned rating grade, and must be updated immediately in the event of any change or amendment.
Failure to meet required minimum credit rating
If a company’s or foreign branch’s credit rating falls below the prescribed minimum level, it is required to take corrective measures immediately following the issuance of the rating report. An approved remediation plan, including a defined timeframe and milestones, must be submitted by the board of directors within 90 days of the report’s issuance.
The resolution further states that the IRU may take appropriate supervisory measures in cases of non-compliance or failure to achieve the required improvement in credit rating, to protect the public interest and safeguard policyholders’ rights. Violations of the decision will result in the legal liabilities stipulated under applicable law.