The Maldives Monetary Authority (MMA) has introduced two comprehensive regulations under the Insurance Act (Act No. 13/2025), strengthening the regulatory framework governing insurance operations in the Maldives and establishing clearer standards for domestic coverage, licensing, market supervision and policyholder protection.
The regulations, published in the Government Gazette, comprise the Regulation on Insurance Regarding Risks Located in the Maldives and the Regulation on Insurance General Provisions. Together, they provide a more structured framework for the country’s insurance industry while supporting the Government’s broader efforts to strengthen financial sector governance, regulatory transparency and institutional resilience.
Under Regulation 2026/R-70, insurance coverage for risks located within the Maldives must generally be obtained from an insurance company licensed by the MMA, unless the relevant circumstances qualify for an exemption. The requirement is expected to support the development of the domestic insurance market by directing locally based risks towards regulated insurers operating within the country while maintaining provisions for accessing international markets where appropriate.
The regulation defines risks located in the Maldives to include property situated within the country, vessels registered in the Maldives, risks associated with residents and locally registered businesses, and liabilities arising from activities undertaken within Maldivian territory. The framework therefore covers a broad range of commercial, corporate, maritime, property and liability-related insurance requirements across the economy.
At the same time, the regulation provides flexibility for businesses and policyholders requiring specialised insurance solutions that may not be readily available in the domestic market. Exemptions may be granted where suitable local insurance coverage is unavailable, where specialist international coverage is required, where locally licensed insurers do not possess the necessary technical capacity to underwrite a particular risk, or where foreign legislation requires insurance to be obtained from an overseas provider.
Applications for such exemptions are generally required to be submitted to the MMA for consideration, except where the circumstances fall within categories of exemptions separately published by the authority. This arrangement allows the regulator to maintain oversight of insurance risks associated with the Maldives while ensuring that businesses are able to obtain appropriate protection for complex or specialised requirements.
Regulation 2026/R-71 introduces the broader general regulatory framework governing the insurance industry, including procedures relating to insurance solicitation, licensing of insurance companies, management of insurance funds, licensing of insurance brokers, regulatory inspections and administrative enforcement.
A significant requirement introduced under the regulation is that every insurance company must maintain a security deposit of MVR 2 million for each class of insurance business it conducts. The deposit is required to be maintained with the MMA or with a financial institution designated by the authority. The requirement is intended to reinforce financial safeguards within the sector and provide an additional layer of protection supporting the obligations of licensed insurers.
The framework also strengthens the MMA’s supervisory authority over insurance companies and intermediaries. The regulator may conduct onsite inspections to review business operations, governance arrangements, financial management practices and internal control systems, enabling closer monitoring of compliance and institutional standards across the sector.
Where the MMA has reasonable grounds to suspect a breach of regulatory requirements, it may require companies or intermediaries to provide relevant information, documents and records. The authority is also empowered to inspect business premises, accounting records, financial statements, books and other documentation considered necessary for regulatory purposes.
The Insurance Act provides the MMA with a range of administrative measures where regulatory breaches are identified. These include restrictions on business activities, financial penalties and, where warranted, cancellation of licences. The enhanced supervisory provisions are expected to encourage stronger compliance standards and responsible business practices among insurance companies and intermediaries operating in the Maldives.
The introduction of the two regulations represents a further step in the Government’s continuing development of a modern and well-regulated financial services environment. Clearer rules for domestic insurance coverage, licensing, financial safeguards and regulatory supervision are expected to strengthen confidence among policyholders, businesses and investors while supporting the sustainable expansion of the Maldivian insurance industry.
As the Maldives continues to expand its tourism, infrastructure, maritime, real estate and wider commercial sectors, the availability of a strong insurance framework is increasingly important in managing financial and operational risks. The latest regulatory measures provide greater clarity for both domestic and international businesses operating in the country and strengthen the foundations for a stable, transparent and professionally supervised insurance market.
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