The Finance Committee of the Jordan Insurance Federation (JIF) is studying a proposed new model and guidelines for calculating the solvency margins of insurers.
The draft model is part of ongoing initiatives by the Central Bank of Jordan (CBJ) to modernise the regulatory framework of Jordan's insurance sector. By refining solvency margin calculations, the CBJ aims to:
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Enhance overall financial stability in the insurance market.
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Ensure the long-term continuity and financial solvency of operating companies.
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Guarantee the capacity of insurers to settle claims and protect the rights of policyholders and beneficiaries.
To evaluate the CBJ model and to meet regulatory objectives, the Finance Committee held a meeting on 7 July, attended by representatives of 16 insurance companies, according to the JIF in a statement posted on its Facebook page.
Meeting participants reviewed the model's core features, evaluating its alignment with both local regulatory mandates and international best practices. They also discussed the likely effects of applying the proposed model on the financial and operating performance of insurance companies.
The meeting also reviewed proposals submitted by insurance companies, which would help the JIF craft the solvency margin calculation model in a way that would ensure a balance between regulatory requirements and the operational capabilities of companies, to enhance the sustainability of the sector.
As part of the insurance industry’s assessment, insurers will conduct a trial application of the new solvency margin calculation model to understand its implications.
Based on the proposals of insurance companies and the observations that were raised during the meeting, the JIF will submit to the CBJ its views on the proposed solvency margin model.