A number of issues in the proposed new insurance law still need to be ironed out, even as the insurance industry in Jordan is eager for the amended law to be enacted, said Mr Majed Smeirat, president of the Jordan Insurance Federation (JIF).
The Parliamentary Economy and Investment Committee last week discussed and approved the draft insurance law ahead of sending it to the House of Representatives for a vote and then proceeding with constitutional procedures for the Bill to become law.
Mr Smeirat said that several points in the proposed amended law not agreed upon are those related to governance, as well as provisions that may entail additional costs for insurance companies. Among measures proposed are a traffic accident fund and a requirement for insurers to support troubled insurance companies, reported Em News.
The clause related to the traffic accident fund provides for a committee whose decision is binding on insurance companies. Insurers are barred from resorting to the courts if they do not agree with the compensation amount. Mr Smeirat indicated that he had informed the Parliamentary Committee that this article violates the Constitution because it prohibits Insurers from taking cases to court.
The proposed law also requires insurers to contribute a portion of their premiums to support troubled companies. Mr Smeirat said that companies that are managed properly should not have to bear the burden of bailing out companies that fail financially due to mistakes in management or underwriting. One proposal is for each insurer to place a deposit with the industry regulator of JOD1m ($1.4m), up from JOD300,000 at present so that the deposit may be used to fund troubled insurers.
Also among other changes, the law, when passed and gazetted, will transfer supervision of the insurance sector from the Insurance Department under the Ministry to the Central Bank of Jordan.