Iranian lawmakers want the Central Insurance of Iran (CII), the industry’s regulator, to take measures to increase the country’s 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 Parliament last December, reported Financial Tribune. The present penetration rate is about 2%.
The lawmakers 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.
CII has been working on plans to promote life insurance, requiring insurers to separate life insurance reserves from those of other classes of business and raising public awareness about the many benefits of life insurance.
In addition, lawmakers have directed that CII to revise regulations on insurers’ reserve calculations and investments to promote the efficiency of these functions and the sustainability of the country’s economy.
Some insurers are reportedly using their life insurance reserves to cover losses in other classes, including motor and health insurance.
The lawmakers’ plan also urges CII to introduce new insurance offerings to cover risks in the production and trade sectors.