Central Insurance of Iran–the main insurance regulatory body—says its biggest concern would be to ensure the financial health of insurance companies and ascertain their ability to compensate their clients.
“Operation risk of insurance companies carries risks and could expose the insurers, the government and society to potential crises,” Mohammad Ebrahim Amin, CII’s CEO, warned, IRNA reported.
Amin emphasized the need for insurance companies to observe the rules of their profession.
“The problems of some insurance companies struggling to indemnify their clients are operational rather than political,” he said.
The CEO was ostensibly referring to insurance companies that have gone bankrupt recently. A notable case occurred when Tose’e Insurance Company failed to compensate its clients. The failure happened after the insurer’s speculative ventures in the real-estate market ran amok when the housing bubble burst in 2012.
Amin railed against insurers who appropriate their companies’ revenues and use them for speculative activities and then tinker with their financial records to cover things up.
“The rights of clients are preserved only when there is financial and managerial strength in an insurance company,” he said. “When an insurance company regards compensation of its clients a disaster, that company is exposed to operational risk,” he added.
One reason for insurers’ failure to indemnify their clients is that they do not charge realistic premiums to sell their insurance policies, which also stems from the imprudence of insurance executives, he stated.
Amin acknowledged the fact that the CII does not have enough agents to monitor every detail of insurance firms but said the regulator would put “financial affairs” on top of its agenda.
“We will make sure that insurers have enough accessible cash when it comes to compensating their client,” he said.
