The insurance regulator, Central Insurance of Iran (CII), is expected to bar general insurers from accepting reinsurance risks from the next fiscal year beginning on 21 March 2017.
The CII, as the industry’s regulator, defines a cap for insurers and reinsurers on accepting reinsurance risks at the beginning of each fiscal year. The CII has been repeatedly criticised for being involved in commercial activities, but the regulator said its reinsurance activities are necessary for supervising the market, reported Financial Tribune.
Amin Re’s Chief Executive, Mr Mostafa Kiaei, said: “Currently, the Central Insurance of Iran and Iran Insurance Company collectively control 90% of the Iranian reinsurance market. But the CII is more flexible in its operations as in some cases, it has transferred a portion of risks to Amin Re.”
Mr Kiaei said that a decision barring insurers from reinsurance business would make Amin Re’s shares more appealing to general insurers.
He was referring to the impending divestment by the Iranian government of its 14% stake in Amin Re which is set to take place by 20 March this year, the end of the current Iranian year.
Mr Kiaei said: “Iran Foreign Investment Company (IFIC), owned by the government, has 14% of the shares in Amin Re, and the government has recently approved the divestment of IFIC’s shares on Iran Fara Bourse.”
The measure put forward by Economy Minister Ali Tayyebnia was approved by the Cabinet and declared by First Vice President Es’haq Jahangiri in early January.
Last December, the Iranian Parliament required the government to divest its shares in insurers, except for its stake in the CII and Iran Insurance Company which is the only insurer fully owned by the state.