Tehran Ruck Reinsurance Company (Tehran Re) has received operation license from the Central Insurance company of Iran (CII) becoming the fifth reinsurance company in the country.
As per an announcement seen on the CII website, Tehran Ruck Reinsurance can cover risks in all categories.
The private company is starting with five trillion rials ($18 million), 28.9% of which was secured via an IPO held in January. The company sold 1.44 billion shares for 1,000 rials each. Each retail or institutional trader could buy 1 million shares.
Tehran Ruck is the fifth of its kind in Iran and the third to be founded in the fiscal year that ends in March, Risknews reported.
Back in April, CII issued operation license for Saman Reinsurance Company, allowing the private firm to start operations. The regulator also issued a license allowing Iran Moein Insurance Company to move from general insurance to reinsurance.
As per the CII announcement, this company discontinued insurance business from the beginning of the fiscal year on March 21.
Iran Moein is owned by the giant Iran Insurance Company and was established to cover risks in the free trade and economic zones.
Amin Re and Iranian Re were the two main reinsurance companies so far. Pars Reinsurance Company, affiliated to Parsian Bank, has also acquired a permit.
A limited number of firms have permits from the regulator to enter the gradually growing reinsurance industry. Market observers say loopholes and poor regulations are depriving the reinsurance industry from playing its deserved role.
However, imposition of US economic 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.
CII said earlier it had received 30 applications for setting up insurance and reinsurance firms. So far 34 insurance companies operate in Iran including offshore firms and reinsurance companies. The number is likely to reach 46 with the regulator saying that 12 are now ready to enter the market.
