Mandatory cessions with Central Insurance of Iran unchanged
Source: Middle East Insurance Review | Apr 2017
The Iranian Cabinet has decided to keep the existing cap on compulsory reinsurance unchanged for the moment.
This means that all insurers in Iran must cede 15% and 25% of all their reinsurance business to the Central Insurance of Iran (CII) for life and non-life business, respectively, reported Financial Tribune.
As decided at a Cabinet meeting in February, presided over by President Hassan Rouhani, the compulsory cessions will remain the same until “new rates are devised within the framework of the law”.
Insurers keep funds with CII, the supervisory agency of the sector, so that a portion of their risk is transferred to reinsurance. This arrangement has been criticised for effectively creating a line of business for the regulator, but CII calls it an extension of its supervisory mandate.