Foreign Insurance Companies & Local Insurance Companies

A Supplement to Peyk-e Bimeh (International Dept.)

Dr. Javad Farshbaf Maheryan, the President of Bimeh Markazi Iran (Central Insurance of

IR Iran), announced the law for the involvement of foreign insurance companies will be soon

officially declared.

Concerning the development of insurance cited in Article 106, the members of Parliament (Majlis) of the Islamic Republic of Iran ratified the involvement of foreign insurance companies in local insurance companies, non-governmental sector in particular, in order to establish joint commercial insurance company, absorb foreign investment by local insurance companies, and establish branches and agencies for insurance companies.

Dr. Farshbaf Maheryan acknowledged that every single detail for the involvement of foreign insurance companies had not only been already predicted but also fully explained in the laws of Bimeh Markazi and the High Council of Insurance will contribute to further progress and more motivation for foreign insurance companies.

With regard to the Fifth Plan Bill, the Parliament members also ratified Article 107 allowing the government to revise tariff supervision system and gradual reduction in ceding compulsory reinsurance to Bimeh Markazi based on law, plus replacing integrated supervision system with financial regulation system, preventing monopoly, increasing competition, solvency, and ranking insurance companies. The above-mentioned missions ought to be accomplished by the end of the third year of the Plan.

Mrs. Mina Sadigh Noohi, the Reinsurance Vice-President of Bimeh Markazi Iran (Central Insurance of IR Iran), announced that it is feasible to provide reinsurance coverage to the region, which is in the domain of Bimeh Markazi. Concerning the plans designed for promoting reinsurance in the country, Bimeh Markazi has taken considerable steps that contributed to less dependence of local reinsurance on foreign players. Bimeh Markazi has even permitted local companies for reinsurance acceptance.

The Reinsurance Vice-President also stated that, recently, the High Council of Insurance has permitted Iranian insurance companies for reinsurance acceptance from abroad.

It is noteworthy that Bimeh Markazi provides other countries in the region, like Turkey and Pakistan, with all the risks that require reinsurance coverage.

Branches & Agencies of Foreign Insurance Companies in Free Trade Zones

Referring to foreigners’ requests for establishing insurance branches and agencies in Iran, Dr. Farshbaf Maheryan, the President of Bimeh Markazi Iran (Central Insurance of IR Iran), said, “We intend to develop insurance industry in the country and extend it further in the region.” He emphasized that presently we can accept and cede insurance among Persian Gulf countries and the markets in the region. Yet, we aim to negotiate and enter into contracts with companies which do not have European insurance coverage.

Regarding the sanctions of insurance in the country especially in reinsurance section, Dr. Farshbaf asserted that the local insurance not only utilizes all their vigor and capacities but also establishes a joint market on their agenda.

Dr. Farshbaf announced that Iranian insurance industry has supplied suitable capacity and reinsurance via a joint market and consortium so we are able to confront the sanctions and obviate the problems.

Following the provisions of the Fifth Development Plan, foreign insurance companies will mostly establish their branches in Free Trade Zones; therefore; investors can invest their capital more safely.

Member of Parliament Economic Commission noted that according to this resolution, permission for the cooperation between foreign and local insurance companies will be issued, by giving priority to non-governmental section, in order to establish a joint insurance company in Iran.

Foreign Insurance Companies ...

Dr. Javad Farshbaf Maheryan, the President of Bimeh Markazi Iran (Central Insurance of IR Iran), appointed Mr. Seyed Hossein Peyman as his advisor of economic affairs.

Through this decree, Dr. Farshbaf Maheryan put great emphasis on Mr. Peyman’s sense of commitment, years of experience as well as valuable aptitude, hoping that by benefiting from the cooperation of insurance companies his role would be influential in the realm of monetary affairs in support of the Iranian Insurance Industry.

He has gained experience in a wide variety of organizational posts such as the Consultant of National Productivity Organization of Iran the Assistant of Socio-economic Directorate of Statistical Center of Iran, the Director of Pricing Index Office of Statistical Center of Iran, the Minister’s Consultant and Director of Public Relations of the Ministry of Economic Affairs and Finance. He is also a university teacher.

President’s Economy Advisor Appointed Insurance Penetration Rate & Produced Premium in Iran In the Fifth Development Plan, it has been predicted that insurance penetration rate in Iran must rise up to 2% in order to be the first in the region. Dr. Farshbaf Maheryan, the President of Bimeh Markazi Iran (Central Insurance of IR Iran), pointed out that at present insurance penetration rate equals 1.4% in Iran. “Since premium per capita is the index of development,” Dr. Farshbaf added, “this index has increased up to $ 63.5 for the
first time in Iran.”

Dr. Farshbaf Maheryan notified that in 2009 produced premium increased to 14.5% which
was 12.5 units more than the world insurance market. He stated, “Produced premiums in

Iran are 10 units more than the countries in the region and 9 units more than Asia, though these figures should not prevent us from expanding insurance market and achieving the first rank in the region.”



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