Jordan: Parliamentary committee approves draft Bill aimed at updating insurance law
Source: Middle East Insurance Review | Mar 2021
The Parliamentary Economy and Investment Committee has approved a draft Bill to update insurance legislation in Jordan.
Representative Khaled Abu Hassan, head of the parliamentary committee, said in a statement in early February that the committee approved the draft law after an in-depth discussion on the proposed articles, according to a Mubasher report.
Among the various proposed amendments, the draft law aims to update the regulatory framework for insurance business so that the sector is supervised in line with best international practices. The draft law transfers supervision of the insurance industry to the Central Bank of Jordan. Currently, the industry is supervised by the Insurance Department under the Ministry of Industry, Trade and Supply.
The proposed amended law has been discussed for several years now. Mr Abu Hassan said that there had been disagreement between the House of Representatives and the Senate over six articles in the draft law, the most prominent of which is the article related to the definition of the main shareholder of an insurance company. The article defines ‘main shareholder’ as ‘anyone who has control over no less than 5% of the insurance company’s capital’.
He indicated that the committee decided eventually to keep the ‘main shareholder’ criterion of ‘not less than 5%’, explaining that the committee’s decision was made because of the conviction that a stake of at least 5% would contribute to implementing standards of good governance and strengthening oversight over the insurance sector. The committee approved the rest of the articles.
In Jordan’s legislative system, proposals are referred by the Prime Minister to the House of Representatives, where deputies can either accept, amend or reject them. Each proposal is referred to a special committee in the Lower House for consideration. If the representatives accept the proposal, they refer it to the government to draft it in the form of a Bill which is submitted back to the House for approval. A Bill approved by the House is passed to the Senate for debate and a vote. If approved, the Bill is then submitted to the king. M