This agreement was needed because of note 3 of the Act of “Stablishment of the Non Government Insurance Companies”. This “note” replaced the minimum capital requirement of article 36 of the “Stablishment of Central Insurance of Iran and Insurance Operation" Act and transferred the authority to set out such minimum by the Cabinet of Ministers.
The minimums are as follows:
• For life company
• For Non life company
• For composite (life and non life) company
• For reinsurance company
Bylaw No.40
Regulations of Establishment of Non Government Insurance Companies (January 2002)
High Council of Insurance with regards to the Act of “ Establishment of Non Government Insurance Companies ” approved by the Islamic Council Assembly (Parliament) on 28th August 2001 and accordance to note 5 of article 17 of the “ Central Insurance of Iran Establishment and Insurance Operations ” Act, is approving the regulations of the establishment of non government insurance companies as follows:
Article.1
In this bylaw the words used in the following are used with the relevant explanations:
A. Insurance Company: The insurance company which based on the Act of “ Establishment of Non Government Insurance Companies ” approved by the Islamic Council Assembly on 28th August 2001 and subject to the “ Central Insurance of Iran Establishment and Insurance Operation ” Act and the regulations of this bylaw, is established in the form of non government and will undertake insurance operations. The non government insurance company is named insurance company in this bylaw
B. Local Actual Entity: A person who is a citizen of Islamic Republic of Iran.
C. Local Legal Entity: A legal entity which is domiciled in Iran and has been registered subject to I.R.of Iran respective laws by the relevant authorities.
D. Principal Agreement: The agreement with the application of establishment of insurance company which will be issued after approval of General Assembly of Central Insurance of Iran for initiating the registration file and subscription of shares.
E. Establishment Permit: The agreement with registration of insurance company in the “ Companies Registration Authority ” which will be issued by Central Insurance of Iran after approval of the draft of the “ articles of association ” and election of the first directors and auditor(s) in the general assembly of the establishing partners and subject to compliance with necessary conditions as set out in the Principal Agreement.
F. Operation Permit: The permit which will be issued by Central Insurance of Iran for undertaking insurance operation in one or several insurance fields.
G. Establishment Act: The “Central Insurance of Iran Establishment and Insurance Operation" Act dated 1971 and subsequent amendments.
Article2.
Establishment of insurance company is only possible in the form of an Iranian public joint stock company with all shares being registered and with due observance of “ Establishment Act ” and accordance with the" Commercial Law ”.
Article 3.
The founders of the insurance company should not have a record of condemnation as per article 64 of “Establishment Act ” and or any other condemnation with an effect on their social right.
Article 4.
Ministries, government companies , non government public foundations and companies subject to article 2 of “ Government Financial Regulations ” Act , could not be within the founders of insurance company.
Note 1.
Ministries , companies and foundations that are subject to this article , can not hold more than ten per cent shares in insurance company.
Note 2.
Companies subject to the note of article 4 of the Act of “ General Auditing of the Country “ are not subject to this article , but in any case their total shares in insurance company could not be more than 20%.
Article 5.
The legal entities in which , Ministries , government companies and non government public foundations have more than 20% share , can not have altogether more than 20% share in insurance company.
Article 6.
In compliance with article 33 of “ Establishment Act ” , the total of the following entities will be considered as one entity:
A. The applicant actual entity together with the relatives as set out in the referred article.
B.The legal entity in which the applicant actual entity and or the relatives as set out in the referred article , have more than 20% vote.
C. The applicant legal entity together with other legal entities where the applicant has more than 20% vote directly or through intermediary.
D. The legal entities in which an actual or legal entity simultaneously have more than 20% vote directly or through intermediary.
Article 7.
To gain the Principal Agreement , local actual and legal entities which qualify the conditions of this bylaw , should provide their application for establishment of insurance company together with the draft of articles of association , comprehensive business plan and other documents and information which are needed to show compliance with conditions of “ Establishment Act “ and this bylaw , to Central Insurance of Iran.
Note 1.
The comprehensive business plan should include the objectives of the company , the target markets , reinsurance plans and ways to achieve the desired targets for at least the first three years of the operation of the insurance company.
Note 2.
After receipt of the documents from the applicant , if the Central Insurance of Iran required other documents and information to show compliance with the conditions , should advise the applicant in writing within fifteen working days.
Article 8.
If legal entity or entities are within the founders of the insurance company , the founders are obligated to provide a copy of the articles of association and the approved balance sheet and profit and loss statement of that legal entity or entities for the past three fiscal years together with an statement including the name of the board of directors and major shareholders (owning more than five per cent shares ) and other necessary information to Central Insurance of Iran.
Article 9.
Central Insurance of Iran , after receipt of all documents and information and verification of the legal conditions of the founders, will present views to the High Council of Insurance at most in one month for legal procedures.
Article 10.
The content of the announcement of subscription of shares should be approved by Central Insurance of Iran prior to being provided to “ Companies Registration Office ” .
Article 11.
The board members ( whether actual entities or the representative of the legal entities ) , managing director and deputy managing director ( if there is one ) should in addition to having a related bachelor degree ( insurance , economics , financial affairs , management , law and similar branches ) and not having condemnations of the subject of article 64 of “ Establishment Act ” enjoy good reputation to be verified by Central Insurance of Iran. The managing director and deputy managing director ( if there is one ) should have a sound and effective work experience to be verified by Central Insurance of Iran.
Article 12.
Auditor and legal inspector of the insurance company should be elected from the official accountants of the subject of “Use of the special and Professional Services of Qualified Accountants as Official Accountants ” Act.
Article 13.
The insurance companies which will operate in life insurances , have to appoint an actuary to be verified by Central Insurance of Iran.
Article 14.
None of the board members , managing director and deputy managing director of insurance company could have a position in other insurance companies , brokers and insurance agents.
Article 15.
After approval of capital , articles of association and appointment of directors , legal inspector and any other items as set out in “Commercial Law ” in the Founders General Assembly and also the appointment of the managing director and the actuary if applicable ,Central Insurance of Iran with due observance of regulations will issue the “Establishment Permit ” of the insurance company.
Article 16.
The validity period of the preliminary permit and “ Establishment Permit ” is maximum one year after issue unless prior to expiry as per the applicant’s request and approval of Central Insurance of Iran this validity is extended .
Note :
The issued permits are not transferable to others.
Article 17.
To issue “ Operation Permit ” in each of the branches of property , life or liability , the insurance company should introduce the technical director whose qualification should be approved by Central Insurance.
Article 18.
Central Insurance of Iran after registration of insurance company and introduction of approved Technical director or directors , will issue the “ Operation Permit ” for the requested branches , in a moth , subject to the articles of association .
Article 19.
The directors of the insurance company are obligated to administer the insurance company based on the projected business plan and any change in the general business plan should be priorly advised to and approved by Central Insurance of Iran.
Article 20.
To undertake inward reinsurance operation from abroad unless in the form of reciprocity within the limit approved by Central Insurance of Iran , is subject to the minimum capital requirement for reinsurance companies and receipt of a separate “ Operation Permit ” from Central Insurance of Iran.
Article 21.
The items that are not mentioned in this bylaw , as applicable will be subject to the Act of “ Establishment of Non Government Insurance Companies ” , the “ Central Insurance of Iran Establishment and Insurance Operations ” Act , “ Commercial Law ” , decisions made by High Council of Insurance , directives of Central Insurance of Iran and other current laws and egulations.
These conditions in 21 articles and 5 notes were ratified in High Council of Insurance on 21st January 2002
The Executive Procedures of the Bylaw of Establishment, Operation and Discontinuation of the Contact Offices of Foreign Insurance companies and Insurance Brokers in the Islamic Republic of Iran.(May 2002)
In Compliance with article 6 of the Bylaw of Establishments, Operation and Discontinuation of the Contact Offices of Foreign Insurance Brokers in the Islamic Republic of Iran, the Executive Procedures of the said Bylaw is approved by the Executive Board of Central Insurance of Iran on their session of 14th May 2002 in 15 articles as detailed here below .
Article 1
In this Executive Procedures the following words are used in place of the relevant sentences :
A. Applicant Company : The foreign Insurance company and Insurance Broker which applies for establishment of a contact office in the Islamic Republic of Iran .
B. Contact Office : The contact office of the foreign insurance company and insurance broker in the Islamic Republic of Iran .
C. Registration Office : The Companies and Industrial Ownership Authority .
Article 2
The applicant company could establish a contact office in the Islamic Republic of Iran subject to the regulations of this Executive Procedures .
Article 3
The central office of the applicant company should apply in writing to the Central Insurance of Iran together with the feasibility report including the reasons and necessity of establishment of the contact office and the latest annual report including the financial status and activities of the company and its standing in its domicile insurance industry.
Article 4
Central Insurance of Iran will consider the received applications for establishment of contact offices subject to the political and economical relationship of Islamic Republic of Iran with domicile of the applicant company and the content of Article 3 of this Executive Procedure .The establishment permit of the contact office will be issued after approval of the President of Central Insurance of Iran and the result will be advised to the applicant company.
Article 5The applicant company has 6 months time after the date of issuance of the permit to establish its contact office. Otherwise such issued permit will be considered, as void and establishment of a contact office need a new permit.
Article 6
Registrations of the contact office in the Registration Office should be in compliance with regulations of Registration of Foreign Companies Offices and should be published in the Official Gazette. To register the contact office , providing the establishment permit issued by Central Insurance of Iran is mandatory .
Article 7
The applicant company should inform the Central Insurance of Iran of the name and biography of the contact office manager at the time of appointment .
Article 8
The address of the contact office will be published in the Official Gazette with prior advice to Central Insurance of Iran . Any change in the address should be with the knowledge of Central Insurance of Iran and Registration Office and should be published in the Official Gazette .
Article 9
There are no limitation as to the number of employees of the contact office , but the foreign employees should not be more than 50 per cent of the total employees of the office .
Article10
Foreign employees of such offices have to acquire residence visa and valid work permit issued by the authorities of the Islamic Republic of Iran.
Article 11.
If the manager of the contact office does not attend the relevant contact office for more then three successive months without the knowledge of Central Insurance of Iran , the latter could suspend the operation permit of the office . Removal of suspension is subject to the requirement of the applicant company and introduction of the manager during one month after the suspension and approval of Central Insurance of Iran .
Article 12
In the event that contact office violates the laws and regulations of the Islamic Republic of Iran or act beyond the scope defined in the Bylaw , the central Insurance of Iran may , as applicable , reprimand , give notice or with the approval of the President ( of Central Insurance of Iran ) cancel the operation permit of the contact office .
Article 13.
The contact offices are obligated to provide a report of their annual operation at the end of each fiscal year to the Central Insurance of Iran . In addition , the Central Insurance of Iran may at any given time , inspect the contact offices .
Article 14
The applicant company may close its office with the knowledge of Central Insurance of Iran .
Article 15
Cancellation of the operation permit of the office or its closure for any reason , should be registered in the Registrations Office and be published in the Official Gazette .
