Social Insurance Institution (21.06.2020) In context of the improvement in life rates in Kuwait and the decrease in death rates due to the development of health care, the Kuwaiti National Assembly approved a draft law amending some provisions of the Social Insurance Law related to the replacement system, whereby the tables of the replacement value were modified so that the insured and the pensioners could obtain higher replacement values than before.
the Kuwaiti National Assembly approved a draft law amending some provisions of the Social Insurance Law related to the replacement system, whereby the tables of the replacement value were modified so that the insured and the pensioners could obtain higher replacement values than before.
Amendments to the insurance law are in the interest of the citizen
The General Organization for Social Insurance announced that the amendments made to some provisions of the Social Insurance Law regarding replacement are in the interest of the citizen primarily and came according to the recommendations of actuaries in the International Labor Organization of the United Nations Organization.
The Foundation said in a statement to Kuwait News Agency (KUNA) today that the social insurance system is based on social solidarity in which community members are involved in preserving public and private interests and on the basis of joint responsibility between them in securing the dangers that are attached to them.
She explained that, according to the provisions of Article 78 bis of the Insurance Law, it examines the financial position of the replacement system at least once every six years with the knowledge of an actuary who has found from the last examination the achievement of the replacement system for financial balance.
She noted that the actuary had recommended that the schedule of replacement transactions be adjusted in line with the rate of return on investment and the death rates used to enable the system to absorb this cost without a negative impact on the financial balance of the system.
She indicated that, accordingly, the draft law has been prepared and stipulates in the first article "to replace the schedule stipulated in Article (77) of the Social Insurance Law with the new schedule to amend the replacement rates according to the actuary's recommendation and to ensure that the negative impact on the financial balance of the replacement system is not affected."
And the second article included a transitional provision "by re-settling the replacement part of the actual or default pension for the existing replacement cases for the remaining period of the replacement and the age at the date of work in this law in accordance with the attached table"
She said that with the improvement in life rates in Kuwait and the decrease in death rates due to the development of the methods of health care provided and that the replacement is lost by death, this led the institution to amend the schedule in line with the recommendation of the actuary and achieve greater benefit for the replacements, in addition to that the replacement schedule is fixed and does not change in terms of age And the replacement periods, which confirms that they are different from the loans granted by banks, which are linked to variables and interest rates.
The Foundation indicated that the settlement will be resettled from the date the law comes into effect for all of the replacements and that new cases of replacement will be submitted according to the new schedule.
The corporation said that the substitution is an optional right prescribed by the Social Security Law since the date of work in which the actual or virtual pensioner is allowed to replace a part of the retirement pension with a one-payment amount according to specific conditions and controls within the law, including a schedule specifying the replacement transactions according to age.
She explained that the substitution is of the same fabric as the pension and other rights defined by the law prescribed by the social insurance systems that are based on social solidarity based on the commitment of the state in accordance with Article (11) of the Constitution to provide social insurance services.
The Foundation pointed out some examples of beneficiaries of re-settlement in the new amendments, especially for older ages. For example, the replacement who is 61 years old with 14 years remaining period in the replacement will be the reduction of the replaced part if this part was 200 to 149 Kuwaiti dinars from the date of the law’s introduction the new.
In another example, the reduction of the replacement part for a 63-year-old with 10 years will be the remainder of the replacement if the replaced part is 350 to 279 dinars as of the date of operation of the law, and all of this is based on the recommendation of actuaries in the International Labor Organization.
The law approved the permitting of replacements for life and increasing periods of those who are not entitled to exchange again by submitting to the Foundation a new replacement request.
In the second session, the Kuwaiti National Assembly approved a draft law amending some provisions of the Social Insurance Law related to the replacement system, whereby the tables of the replacement value were modified so that the insured and the pensioners could obtain higher replacement values than before.