59713
Gov't Sets Capital Requirement for Insurance Firms
Gov't Sets Capital Requirement for Insurance Firms
  1. Economy
  2. Business And Markets

Iranian Gov't Sets Capital Requirement for Insurance Firms

  1. Economy
  2. Business And Markets

Iranian Gov't Sets Capital Requirement for Insurance Firms

The government has approved a proposal for setting the minimum capital required for establishing insurance firms during a Cabinet meeting on Sunday.
The measure also lowers the minimum capital requirement for firms already operating in the insurance market. 
Based on the measure, at least 1 trillion rials ($26 million) are needed for obtaining the operation license for insurance firms in Iran’s mainland, Risknews.ir reported. 
New insurance firms will need to have additional capital for getting the operation license in each insurance category, in addition to the initial capital.  
The amount is set at 300 billion rials ($7.8 million) for non-life categories and 200 billion rials ($5.25 million) for life insurance category. 
The license of general firms, therefore, will be granted with an initial capital asset of 1.5 trillion rials ($39.11 million). The Cabinet also agreed on 2.5 trillion rials ($65.18 million) as the initial capital requirement for starting reinsurance firms in Iran. 
However, the Central Insurance of Iran has announced that it will not issue any new licenses for general insurance firms. It aims to enhance the quality of insurance services in Iran by increasing the number of specialized insurance companies.  
Tejarat Nou Insurance, affiliated with Tejarat Bank, was the latest general firm to receive a license, with an initial capital of 2.5 trillion rials. 
Middle East Life Insurance was the first specialized firm, which started operations with an initial capital of 1.2 trillion rials ($31.29 million).
Hekmat Saba Insurance and Shahr Insurance are new applicants seeking the CII license.

Recapitalization
The Central Insurance of Iran requires established general insurance firms to raise their capital to at least 2.5 trillion rials by the end of the current fiscal year (March 20). Following the recent approval, insurers are required to meet similar standards for their capital.
CII announced that it would consider merging firms with low capital. At present, 27 insurance and reinsurance firms are licensed by CII. 
However, only seven insurers managed to meet the capital requirement, which made the regulator revise the standards. 
Parsian Insurance, Asia Insurance, Razi Insurance, Karafarin Insurance and Pasargad Insurance met the capital requirements after the ceiling was lowered. 
The cap for reinsurance firms was 4 trillion rials ($104.3 million), which has now been lowered to 2.5 trillion rials. 
Iranian Re, affiliated with Bank Pasargad Iran, and Amin Re, licensed for operating in free trade zones, are the only reinsurance firms in Iran. Both firms have increased their capital recently and face no problems, following the recent measure.
Iran Insurance Company, the only state-owned firm, has the highest capital compared with other insurers–34 trillion rials ($886.5 million). The insurer is planning to raise its capital to 100 trillion rials ($2.6 billion) by March 20.
With 4 trillion rials ($104.3 million), Alborz Insurance, one of the big four private insurers, is the top private firm in terms of capital.

Short URL : https://goo.gl/HqAU0y
  1. https://goo.gl/60qpMd
  • https://goo.gl/VICh8p
  • https://goo.gl/12Mp8V
  • https://goo.gl/v6K1sk
  • https://goo.gl/7623Nx

You can also read ...

NISTC Could Undermine Suez Canal’s Importance
Iran and Azerbaijan inaugurated a short railroad in early March...
The 14.5% rise in workers’ minimum wage is one of the lowest wage growths witnessed in the last 10 years, though the economy has also experienced the lowest inflation rate in a decade.
After a 12-hour session, the Supreme Labor Council agreed to...
Iranian Lenders Hobbled by Big Bank Qualms
Iran's banking network has historically had a robust presence in...
[The burden of the government’s payment arrears to CBI lightened, posting a drop of 17 trillion rials ($450 million).
Data released by the Central Bank of Iran for the month ending...
The Law on Implementation of Article 44 of the Constitution does not allow dismissal of employees following the privatization of companies.
The remaining 323 out of 1,713 enterprises on the privatization...
CBI  Priorities  for Next Year
The Governor of the Central Bank of Iran has named bringing...
1.5b Tons of New Metal Reserves
Over 1.5 billion tons of proven metal reserves have been...
Gold Down, USD Up
Bahar Azadi Gold Coin fell by 100,000 rials on Wednesday,...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus