Mena News - Jordan: Insurance Commission Issues Corporate Governance Instructions
Source: Middle East Insurance Review | Mar 2007
The Insurance Commission (IC) has issued instructions on corporate governance in insurance aiming to enhance the performance of the insurance industry in Jordan.
In a statement, the IC says that the instructions aim at deepening corporate governance concepts through defining the responsibilities and authority of the boards of directors of insurance companies. Moreover, they stress the need to form audit committees to ensure the proper implementation of corporate governance concepts in the companies. In addition, the regulations stress that insurance companies ought to observe proper risk management strategy and establish an effective internal control and monitoring system.
Dr Bassel Hindawi, Director General of the commission, points out that the objective of issuing the instructions goes back to the important role which corporate governance standards play in developing the insurance industry, in addition to the fact that the effectiveness of these standards is an important element of attracting investments. Hence, commitment to corporate governance standards would reflect positively on the performance of insurers, through the efficient use of resources, market competitiveness and strengthening the stability of financial markets.
He says that the instructions are consistent with the recommendations of the “We Are All Jordan” document, and with international standards on corporate governance issued by the International Association of Insurance Supervisors (IAIS).
The instructions came as a result of maintaining a prudential supervision system adopted by the IC to regulate the insurance sector within technical, legal, and financial frameworks, which comply with IAIS principles and standards.
(The ‘’We Are All Jordan’’ document is an action plan drawn up in 2006 by key local leaders in Jordan setting out the country’s priorities.)