First: Legislation related to Insurance activities:-
The Jordan Legislations on insurance, stated in the general Act and other Regulations regulating the various economic and financial activities in Jordan has set up special terms for insurance business as follows:-
1- The Civil Act No. (43) for the year 1976
The Civil Act has provided special regulations of the Insurance Contract: -
(A)- Chapter three of volume one (Harmful action).
(B)- Volume two - Chapter four (Peril contracts).
- Chapter one (Mortgage & Gambling)
- Chapter Two: Salary on all life
- Chapter Three: Insurance Contract.
- Terms and Conditions of the Contract
- Effects of the Contract.
- Obligations of the insured party.
- Obligations of the insurer.
- Special Regulations for Certain Types of Insurance.
- Fire Insurance
- Life Insurance.
2- Jordan Maritime Commercial Act No.(12) of 1972
Jordan Maritime Commercial Act, in chapter nine thereof, relevant to insurance, provided for the insurance affairs related to Marine Trade activities as follows.
Section Nine : (Insurance):
- Terms of performing the contract and the authenticity of obligations of the insured party.
- Regulations relevant to insurance business.
- Insured risks and exempted risks.
- Determination and settlement of insurance compensation.
- Litigation for marine losses.
- Rules for abandonment
3 – Commercial Act No. (12) of 1966
The act has a special chapter in the transportation contract Article (1/72) that the transporter is in charge of any destruction, defection or shortage of things transported and for that Article (73) from the same act has give the right for the receiver to raise a case directly on the transporter and with this case receiver can demand delivering or charge him for damages. Article (77) from the same act assure that the passenger must arrive safe for his destination.
4 – Companies Act No. (22) for the year 1997
Articles 93, 99, 212 & 255) of this Act provided that insurance activities should be performed only by Public Share Holding Companies, and that the shares subscribed for by founders of those insurance companies must not exceed (50 %) of their authorized capital and the number of founders should be not less than fifty persons. As for the exempted companies involved in insurance or reinsurance business, their capital must not be less than two million dinars. Furthermore, all mortgage contract and insurance effected on companies’ funds and assets three months prior to the Decision of Liquidating the Company are deemed nil and void.
Second : 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 and the regulations, Instructions and Decisions issued there under Click Here
This 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:
Establishment of an independent entity to be called the “Insurance Regulatory Commission” to assume the duty of supervision, regulation and control over insurance practices.
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.
Adoption of the solvency financial margin instead of depositing financial deposits in the name of the Ministry of Industry and Trade.
unification of the fiscal year initiation and expiry date for all insurance companies.
Limitation of insurance in Jordan to liability transferable and non-transferable assets available in the Kingdom, and imposition of financial fee in case of violation.
Imposition of obligations on the branches of foreign insurance companies running such business in Jordan, relevant to the amounts reserved by companies administration; and publication of its total closing accounts.
2.1** Regulations
- 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
2.2 **Instructions Issued under the Insurance Regulatory Act
- Instructions No. (1) of 2000 - Branches of Instructions and licences of insurance practices and the Amendments thereof.
- Instructions No. (3) of 2001 - Instructions for inspection and estimation of damages sustained by transported and insured goods.
- Instructions No. (4) of 2001 - Instructions for application of international Accounting standards.
- Instructions No. (5) of 2001 - Instructions for insurance company's deposit.
- Instructions No. (2) of 2002 - Basis of Calculating the Technical Provisions Instructions and the Amendments Thereof
- Instructions No. (3) of 2002 - Solvency Margin Instructions.
- Instructions No. (4) of 2002- Reinsurance Instructions and the Amendments Thereof.
- Instructions No. (1) of 2003- Instructions for Granting and Renewing the License to Transact Insurance Business and the Amendments Thereof.
- Instructions No. (2) of 2003- Instructions of the Accounting Policies to be Adopted by the Company and the Forms Required to Prepare the Financial Reports and Statements.
- Instructions No. (3) of 2003- Instructions of Licensing and Regulating the Business of an Actuary and the Amendments Thereof.
- Instructions No. (2) of 2004- Computerization of the Business of Insurance Companies Instructions .
- Instructions No. (5) of 2004- The Instructions of the Insurance Dispute Resolution Committee and the Amendments Thereof.
- Instructions No. (6) of 2004-Fund for Remunerating the Injured Parties From Motor Accidents Instructions.
- Instructions No. (8) of 2004- Instructions of Licensing and Regulating the Business of the Loss Adjuster and the Surveyor and the Amendments Thereof.
- Instructions No. (9) of 2004- Professional Code of Conduct and Ethics for Insurance Companies Instructions.
- Instructions No. (10) of 2004- Services Charges Instructions and the Amendments Thereof.
- Instructions No. (1) of 2005- Instructions of Licensing and Regulating the Business and Responsibilities of an Insurance Agent and the Amendments Thereof.
- Instructions No. (3) of 2005- Instructions of Licensing, Regulating and Supervising the Business of an Insurance Consultant and the Amendments Thereof
- Instructions No. (4) of 2005- Instructions of Licensing and Regulating the Business and Responsibilities of a Reinsurance Broker and the Amendments Thereof
- Instructions No. (6) of 2005- Instructions for Opening A Branch of an Insurance Company Inside or Outside the Kingdom.
- Instructions No. (7) of 2005- Instructions of the Accreditation of Mediators and Arbitrators in Insurance Disputes at the Insurance Commission and the Amendments Thereof.
- Instructions No. (8) of 2005- Instructions of the Procedures and Rules of Mediation in Insurance Disputes and the Amendments Thereof.
- Instructions No. (9) of 2005- Instructions of the Procedures and Rules of Arbitration in Insurance Disputes and the Amendments Thereof.
- Instructions No. (11) of 2005- Instructions of Licensing and Regulating the Business and Responsibilities of an Insurance Broker and the Amendments Thereof.
- Instructions No. (1) of 2006- Instructions of the Basis of Investing the Funds of the Insurance Company and Determining the Nature and the Location of the Insurance Company's Assets that Match its Insurance Obligations and the Amendments Thereof.
- Instructions No. (2) of 2006- Corporate Governance Instructions and the Amendments Thereof.
- Instructions No. (1) of 2008- Instructions of Licensing, Regulating and Supervising the Business of Bancassurance and the Amendments Thereof.
- Instructions No. (2) of 2008- Instructions of Licensing and Supervising the Business of Non-Operating Foreign Insurance Company in the Kingdom (Regional Company / Representative Office).
-Instructions No. (3) Of 2008- Instructions of Licensing Reinsurance Company and Reinsurance Off Shore Company.
-Instructions No. (7) of 2009- Instructions of Issuing Fire Insurance Policies and the Amendments Thereof.
-Instructions No. (11) of 2009- Instructions of Regulating the Business of the Off Shore Captive Insurance Company
-Instructions No. (12) of 2009-Instructions of Licensing and Regulating the Business and Responsibility of the Captive Manager
-Instructions No. (2) of 2010-Instructions of Regulating and Administrating Corporate Governance for Reinsurance Companies
-Instructions No. (3) of 2010-Instructions of Matters Concerning Contracts Concluded between Insurance Companies and the Company Administrating Expenses and Medical Insurance Services with Medical Insurance Providers.
-Instructions No. (4) of 2010-Instructions of Licensing and Regulating the Business and Responsibility of the Coverholdere
-Instructions No. (5) of 2010-Instructions of Issuing Compulsory Motor Insurance Policies.
-Instructions No. (6) of 2010-Instructions of Anti Money Laundering and Counter Terrorist Financing in Insurance Activities and the Amendments Thereof.
-Instructions No. (27) of 2010-Instructions of Determining the Volume of Underwriting in Compulsory Motor Insurance and the Amendments Thereof.
-Instructions No. (35) of 2010-Instructions of Licensing and Regulating the Business of an offshore Insurance Company.
-Instructions No. (36) of 2010-Instructions of Licensing and Regulating and Supervising the Business of an Insurance Manager
- Instructions No. (1) of 2011- Instructions of Regulating Takaful Insurance.
- Instructions No. (4) of 2011- Special Instructions of Life Policies Payments.
- Instructions No. (5) of 2011-Instructions of Administrating Life Policies Payments.
-Instructions No. (6) Of 2011- -Instructions of Compulsory Unified Insurance Office and the Amendments Thereof.
-Instructions No. (3) Of 2012- -Instructions of Issuing Complementary (Own Damages) Insurance Policies.
2.3 Decisions Issued under the Insurance Regulatory Act
- Decision No. (1) of the year 2000 for concerning licensing of Insurance Practices.
- Decision No. (3) of the year 2001 for fulfillment the Annual insurance fees.
- Decision No. (6) of the year 2001 for cancellation of Decision No. (11) for the year 1985 and its amending Act No. (1) for the year 1991 relating to instructions for insurance companies remittances to underwriters and other remittances necessary for Insurance Practices.
- Decision No. (9) of the year 2001 for insurance of the Royal Jordanian aircrafts (issued by the Special Bureau for interpretation of Acts pursuant to the provisions of Article No. (27) a b of the Insurance Supervision Act No. (33) for the year 1999.
- Decision No. (5) of the year 2002 Guidelines for Solvency Margin Instruction and the Amendments Thereof
-Decision No.(1) of the year 2003 Decision for Compliance with the Solvency Margin
-Decision No.(6) of the year 2003 Decision of the Forms for Granting,Renewing the License of an Actuary,and the Re-listing in the Register
- Decision No.(7) of the year 2003 Decision of the Forms for Granting.Renewing the license of an Insurance Broker,and the Re- Listing in the Register
- Decision No.(1) of the year 2004 Decision on the Transaction of the Insurance Brokerage Business by a Juridial Person
- Decision No.(4) of the year 2004 Decision of the Forms for the Insurance Brokerage Business
- Decision No.(5) of the year 2004 Decision Property Investment Valuation
- Decision No.(9) of the year 2004 Decision of the Forms for Granting, Renewing the License of an Insurance Agent, and the Re-Listing in the Register
- Decision No. (17) of the year 2004 Decision Concerning Insurance Agents Working within the Motor Licensing Departments Zones.
- Decision No.(2) of the year 2005 Auditor's Certificate Concerning Reinsurance Programs Decision
-Decision No.(4) of the year 2005 Decision of the Form for the Accreditation of the Juridical Insurance Broker
- Decision No.(5) of the year 2005 Decision of the Form for the Accreditation of the Juridical Insurance Agent
-Decision No.(6) of the year 2005 Decision of the Form for the Addition of an Insurance Class to the License of the Insurance Agent
- Decision No.(7) of the year 2005 Decision of the Forms for Granting and Renewing the License of the Loss Adjuster, the Re-Listing in the Register and the Addition of an Insurance Class
- Decision No.(8) of the year 2005 Decision of the Forms for Granting and Renewing the License of the Surveyor, the Re-Listing in the Register and the Addition of an Insurance Class.
- Decision No.(9) of the year 2005 Decision of the Forms for Granting and Renewing the License of the Consultant , the Re-Listing in the Register and the Addition of an Insurance Class.
-Decision No.(10) of the year 2005 Decision of the Forms for Granting and Renewing the License of the Reinsurance Broker and the Re-Listing in the Register.
- Decision No.(11) of the year 2005 Decision of the Form for for Granting and Renewing the License of the Company Administrating the Expenses and Medical Insurance Service.
- Decision No.(15) of the year 2005 Basis of Calculating the Unearned Premiums Reserves for Marine and Transport Insurance License.
-Decision No.(1) of the year 2006 Decision Concerning the Procedures Related to Suspending the License of an Insurance Agent.
-Decision No.(3) of the year 2006 Decision of the Form for the Transfer of the Key Employee in charge of the Insurance Agency Business at a Juridical Insurance Agent to work for another Juridical Insurance Agent.
-Decision No.(4) of the year 2006 Decision of the Form for the Transfer of the Person in Charge of the Insurance Brokerage Business at a Juridical Insurance Broker to work for another Juridical Insurance Broker.
-Decision No.(5) of the year 2006 Decision of the Form for the Addition of an Insurance Class to the License of the Insurance Broker.
-Decision No.(11) of the year 2006 Decision of the Forms Concerning the Accreditation of Mediators and Arbitrators in Insurance Disputes at the Insurance Commission.
- Decision No.(12) of the year 2006 Decision of the Forms Concerning the Mediation Agreement,Mediation Request,Agreement Concerning Mediators in Insurance Disputes and a Pledge to Maintain the Confidentiality of the Mediation Proceedings.
-Decision No.(13) of the year 2006 Decision of the Forms Concerning the Arbitration Agreement, the Arbitration Request and the Agreement Concerning Arbitrators in Insurance Disputes.
-Decision No.(5) of the year 2007 Decision of the Form for Obtaining the Prior Approval of the License to Transact Insurance Business for a Jordanian Insurance Company.
-Decision No.(6) of the year 2007 Decision of the Form for Obtaining the Prior Approval of the License to Transact Insurance Business for a Branch of a Foreign Insurance Company.
-Decision No.(7) of the year 2007 Decision of the Form for Renewing the License to Transact Insurance Business.
- Decision No.(1) of the year 2008 Decision of the Form for the Detailed Information about the Constituents of the Insurance Company.
- Decision No.(3) of the year 2008 Decision Concerning the Transaction of a Reinsurance Broker who is not a Resident of the Kingdom with Local Insurance Companies.
-Decision No.(4) of the year 2008 Formation of the Management Committe of the Fund for Remunerating the Injured Parties from Motor Accidents Decision.
-Decision No.(3) of the year 2009 Decision of the Forms for Granting and Renewing the License of the Non-Operating Foreign Insurance Company in the Kingdom (Regional Company/Representative Office).
-Decision No.(5) of the year 2009 Decision of Collecting Annual Fee from Insurance Company.
-Decision No.(7) of the year 2009 Decision of the From Concerning the Business of Bancassurance.
-Decision No.(11) of the year 2009 Decision of the From of the Actuary Certificate Concerning General Insurance Business .
- Decision No.(1) of the year 2010 Decision Concerning the From Required to Prepare the Financial Reports and Statements .
- Decision No.(5) of the year 2010 Decision of Services Charges For Amending the Compulsory Motor Insurance Policy Data.
-Decision No.(9) of the year 2010 Decision of the Forms Concerning the Business of the Coverholder.
-Decision No.(10) of the year 2010 Decision of the Forms for Obtaining the Prior Approval of the License to Transact Reinsurance Business for a Jordanian Reinsurance Company.
-Decision No.(11) of the year 2010 Decision of the Forms for Obtaining the Prior Approval of the License to Transact Reinsurance Business for a Branch of a Foreign Reinsurance Company.
-Decision No.(12) of the year 2010 Decision of the Forms for Renewing the License to Transact Reinsurance Business .
-Decision No.(15) of the year 2010 Decision of the Forms Concerning the Accreditation of the Compulsory Noto Insurance Policy.
-Decision No.(16) of the year 2010 Decision of the Formation of Committees.
-Decision No.(18) of the year 2010 Decision Concerning the Form of the Endorsement necessary to Amend the Third Party Liability of Compulsory Motor Insurance Policy.
-Decision No.(19) of the year 2010 Decision of the Bases of Claims Settlement For Motor Damages.
-Decision No.(20) of the year 2010 Decision of the Commission of the Insurance Brokers and Agents on the Premiums of Compulsory Motor Insurance Polices.
-Decision No.(21) of the year 2010 Decision of the Form for Opening Branch for Insurance Company Outside the Kingdom.
-Decision No.(24) of the year 2010 Decision on the Financial Reports and Statements for the Supervisory Purposes of the Insurance Commission.
-Decision No.(25) of the year 2010 Decision of the Form For the Detailed Informatio about the Constituents of the Reinsurance Company.
-Decision No.(26) of the year 2010 Formation of the Management Committee of the Fund for Remunerating the Injured Parties from Motor Accidents Decision.
-Decision No.(2) of the year 2011 Formation of the Committee for Resolving Insurance Disputes Decision.
-Decision No.(1) of the year 2012 Basis of the Calculating the Mathematical Provision for Life Assurance Business.
-Decision No.(2) of the year 2012 Decision of the Form of the Actuary Certificate Concerning Life Assurance Business.