Legislation Related to Insurance
1- Acts Controlling Insurance Activities
Control over the activities of insurance companies was commenced in 1965 when Act No. (5) for the year 1965 was issued, but the accelerating progress achieved by insurance companies lead to issuing of Act No. (30) for the year 1984 on 16/12/1984 to deal with the pitfalls found in the pervious Act, and to be more compatible with the economic developments experienced by Jordan at the time: And after eleven years had passed necessities and developments came up in the Jordanian Insurance Market enforcing their existence in the demand for joining others in globalizing its economy to be market oriented towards the international markets and that resulted in issuing a Act amending to the Insurance Control Act No. (9) for the year 1995.
2- Insurance Supervision Act No. (33) for the year 1999 (cancelled)
This Act was issued within the framework of the economic adjustment program adopted by the Hashemite Kingdom of Jordan for restructuring the economic sectors of various forms to reform them according to the requirement of the world trade organization (WTO) and European partnership agreement that Jordan has joined recently. This Act has incorporated advanced principles in addition to regulatory and control instruments suitable for the new international developments, which were not addressed by the previous legislation, of which the most important are the establishment of an independent entity to be called the “Insurance Regulatory Commission” to assume the duty of supervision, regulation and control over insurance practices.Also it emphasized the division of insurance practices into two main types: Life insurance and General Insurances. Also separation between both types in terms of practice, and enforcement of specialization of either type on companies established after the issuance of this Act .This Act was amended only in 2002 and remained active until 14/6/2021 when the New Act No 12 of 2021 was issued and replaced this Act.
3- Insurance Regulatory Act No. 12 of 2021 click here.
The Central Bank of Jordan
Insurance Regulatory Act No. 12 of 2021
Under the issuance of Act No. (12) of 2021 Insurance Regulatory Act which was Published in the Official Gazette No. (5718) on 16-5-2021.The mission of Controlling and supervising of the insurance sector was transferred to the Central Bank of Jordan, since the act was implemented as of 15-6-2021.
The Act came with new concepts on the separation of management from ownership and to strengthen institutional governance in insurance companies, as well as defining the definition of the influential interest and the main shareholder in insurance companies.
All regulations and instructions issued under the previous Act No. 33 of 1999 will remain in effect until they are cancelled or replaced by new articles.
The Insurance RegulatoryAct aims to regulate the rules for practicing insurance business in a way that ensures the insurance sector achieves its goals by updating the regulatory frameworks on insurance business by enabling the Central Bank to supervise and control the sector in line with the best practices applied in the world.
It also aims to strengthen the role of the Central Bank in establishing the rules of institutional governance in insurance companies and insurance service providers, to improve the financial solvency of insurance companies, to set clear and transparent standards for their oversight and to regulate procedures for licensing insurance companies and the processes of ownership of existing companies to prevent control over them by unreliable shareholders, and to grant the Central Bank The necessary powers to deal with troubled companies.
The Act defined the regulatory requirements to ensure the separation between life insurance and general insurances for companies that provide both, and worked to establish the rules for legal regulatory regulation of Takaful insurance companies and activate the role of Sharia supervisory bodies and enhance their governance over Takaful insurance companies, in addition to addressing the shortcomings and loopholes created by the practical application of the current Act No. (33) of 1999 and its amendments.
- Regulation Insurance Practice fees No. (36) of the Year 2000
This Regulation is concerned with the annual fees levied on the total realized premiums and fees for application for practicing Insurance Business, collected by the Insurance Regulatory Commission. A Decision under No. (2) of the year 2000 was issued by virtue of this Act incorporating a mechanism for settlement of due fees to the Authority.
- Insurance Companies Minimum Capital Regulation No. (66) of the Year 2001
This Regulation determined the minimum limit of the company's capital to have the right to practice general insurances, authorized after the Act for control of insurance practices comes into force, by the sum of (10) ten million dinars, and for practicing life insurance was fixed the sum of (15) fifteen million dinars and for re-insurance practices the sum of (50) fifty million dinars,noting that the minimum paid capital for existing companies is (2) two million dinars.
-Regulation No. (12) of 2010- Compulsory Motor Insurance Regulation
-Regulation No. (73) of 2005-Minimum Capital of Insurance and Reinsurance Companies Regulation and the Amendments Thereof Click Here
-Regulation No. (107) of 2008-Jordan Insurance Federation Regulation