TehranRuck Reinsurance Company has issued a subscription notice to sell shares. In a notice seen on Iran Fara Bourse website, investors can subscribe for the shares from Saturday for 15 days.
Subscription of stocks refers to newly issued securities that an investor agrees to buy prior to the official issue date. When investors subscribe, they expect to own the designated number of shares once the offering is complete.
The company is to start operation with a nominal capital of 5 trillion rials ($18 million), 28.9% of which would be secured via the IPO. The company said 1.44 billion shares at 1,000 rials each will be on offer. Each retail or institutional trader can buy 1 million shares.
TehranRuck will be the fifth of its kind in Iran and the third to be founded in the calendar year that ends in March, Risknews reported. It is private company. But no details were available.
Amin Re and Iranian Re are the two main reinsurance companies so far. Saman Reinsurance Company was given a license by the regulator and will make debut soon. It will be Iran's third reinsurer. Pars Reinsurance Company, affiliated to Parsian Bank, is the fourth to acquire a permit.
A limited number of firms have permits from the regulator to enter the gradually growing reinsurance industry. Experts say loopholes and poor regulations are depriving the reinsurance industry from playing its deserved role.
However, reimposition of US sanctions in 2018 plus growing demand for reinsurance has prompted investors to rise to the occasion.
According to a directive issued by the government and the High Council of Insurance, the minimum required capital for establishing an insurance firm is 5 trillion rials.
The Central Insurance company of Iran said earlier it had received 30 applications for setting up insurance and reinsurance firms.
Observers say the regulator's belated decision to promote the insurance industry can and should help create competitiveness. The CII has made known that it will authorize new insurance companies “only if they come with innovative plans.”
So far 33 insurance companies operate in Iran including offshore firms and reinsurance companies. The number is likely to reach 46 with the regulator saying that 13 are ready to enter the market, including two new life insurance companies Karizma Life Insurance and Hamerz Life Insurance; four reinsurance companies, Saman Reinsurance, Pars Reinsurance, Tehran Reinsurance and Raya Reinsurance; and two general insurance firms, Pardis Insurance and Farda Insurance.
The regulator is also expected to issue permission in principle for five other firms, namely Etemad Insurance, Bamdad Insurance, Soroush Insurance, Persian Reinsurance, and Isatis Life Insurance.
