Majlis Sets Agenda for Insurance Industry

Lawmakers have obligated the Central Insurance of Iran, the industry’s regulator, to take measures for increasing the insurance penetration rate to 7% by the end of the sixth five-year development plan (2016-21).

The plan proposed by the government was passed during an open session of the parliament on Saturday, the parliament’s news service ICANA reported.

At present, the industry’s penetration rate is about 2%.

The Majlis also tasked the CII with boosting the share of life insurance to at least 50% of the industry’s total premium income. Life insurance currently accounts for only about 12% of the premiums earned.

The CII has been working on plans to promote life insurance, requiring insurers to separate life insurance reserves from other categories and raising public awareness about the many advantages of life insurance policies.

Insurers’ total premium income reached 158.5 trillion rials ($3.96 billion) by the end of the seven months of the current fiscal year (October 21).

Moreover, the parliament has mandated the regulator to revise regulations on insurance companies’ reserve calculations and investments to promote the efficiency of these resources and the sustainability of the country’s economy.

Ministry of Finance and Economic Affairs is set to make the final revisions to the government for final approval.

Some insurers were reportedly using their life insurance reserves to cover losses in other categories, including motor and health insurance categories.

The plan also urges CII to introduce new insurance categories to cover risks in production and trade sectors.

The regulating body has called for the establishment of specialized insurance firms. Abdolnasser Hemmati, CCI president, had announced earlier that the regulator will no longer issue licenses for general insurance firms.

Middle East Life Insurance, affiliated with Middle East Bank, is set to start operations in the coming months, as the only insurance firm specialized in life insurance.