Before Jordan’s insurance sector came under the oversight of the Central Bank of Jordan (CBJ), it had for years been supervised by a dedicated insurance commission, which was scrapped in a government austerity drive in 2014. The Ministry of Industry, Trade and Supply then took over the function. Formally, the CBJ assumed oversight of the insurance sector in 2021, but discussions and decisions surrounding the transfer had begun in 2016.
This development evolved from February 2016 when the Jordanian Cabinet approved a recommendation by the Infrastructure and Social Affairs Ministerial Committee to task the CBJ with regulation of the sector, in line with international regulatory practices. The Cabinet also pledged reforms to ensure the separation between life and general insurance businesses for composite companies, and to implement prudential requirements concerning the investment policies of insurance companies.
Following several years of discussion, the Parliamentary Economy and Investment Committee approved a draft Bill to update insurance legislation in Jordan, including the transfer of supervision of the insurance industry to the CBJ.
The shift to Central Bank supervision
The Insurance Business Regulation Law No. 12 of 2021, which enabled the transfer, officially took effect in June 2021, as Jordan’s insurance sector was facing structural and regulatory gaps. The transfer raised hopes of reforming the sector’s regulatory environment and bringing it in line with global standards.
Days before the transfer became official, the Middle East Insurance Review spoke to Ms Naljan Hakuz, then director of the Insurance Administration (MIT/IA) at the Jordan Ministry of Industry, Trade and Supply, who said the move could provide a good opportunity to revise insurance broker legislation, fill existing gaps and update the law to keep pace with industry developments, such as e-insurance.
She had added, “It is time to study how we can change licensing brokers from natural to juridical brokers.”
Market performance following the transition
A year after the transfer, this publication spoke to Jordan Insurance Federation (JIF) chairman Majed Smairat, who noted that the CBJ had shown more firmness towards the sector than its predecessor, with three insurance companies already suspended from writing business until they raised their solvency margins.
He added that there had been an improvement in the performance of Jordan’s general insurance sector in 2021 compared to 2020. This was even though the regulator switchover took place at a time when the insurance market was suffering from the impact of the COVID-19 pandemic stemming from an economic slowdown, weak infrastructure activity, and a decline in investments.
The gross written premiums (GWP) of the 24 insurers in Jordan increased by 7.9% for general insurance lines, reaching JOD541.7m in 2021 ($764m, based on the average USD/JOD exchange rate), compared to JOD502m in 2020. The total profits of 19 insurance companies that disclosed their results for 2021 reached JOD15.6m, compared to JOD25.6m for 2020, representing a 39% decline. The sharp decline in profits recorded in 2021 was attributed to an abnormally high profit margin in 2020, when net profit rose significantly compared to 2019, owing to a decrease in claims during pandemic-driven lockdowns.
In 2025, GWP totalled JOD856m, 34% higher compared with 2021 with technical performance also improved in the intervening years.
Solvency
One reason for this is that the CBJ also focused on reinforcing the financial resilience of insurance providers. Capital adequacy thresholds were increased, while solvency frameworks were modernised in accordance with internationally recognised regulatory principles. Several weak insurers were liquidated when they were unable to turn around their insolvent position, The number of insurers in Jordan thus fell to 19 in 2025 from 23 in 2021.
These initiatives aimed to ensure that insurers stay stable and resilient during periods of economic stress, while remaining capable of fulfilling their commitments and supporting broader economic development.
Regulatory modernisation
Meanwhile, regulatory modernisation continues to advance through further legislative updates.
For example, in 2024, Regulation No. 53 concerning the Protection Fund for Policyholders and Beneficiaries was enacted, creating a safeguard mechanism for customers in cases where insurers face bankruptcy or financial collapse. Additional reforms introduced during the same year included updated mandatory motor insurance rules and revisions to the governance structure of the Jordan Insurance Federation, enhancing its supervisory and self-monitoring responsibilities.
Notably, one sweeping milestone in Jordan’s regulatory modernisation is the proposed Insurance Contracts Law. Jordanian lawmakers are currently in the process of enacting the law, the draft of which was approved by the Cabinet in November 2025. Minister of Political and Parliamentary Affairs Abdul Moneim Odat has described this as Jordan’s first dedicated insurance law, integrating Civil Code provisions to regulate land, marine, fire, life, and motor insurance.
This comprehensive legislation explicitly codifies insurance principles like “utmost good faith” and “insurable interest,” aiming to boost consumer trust.
Expectations are that this new law, when enacted, will transform Jordan’s insurance market into a highly transparent, investor-friendly ecosystem.