Article 36

Iranian insurance organizations shall be formed with a minimum capital of 100 million Rials, of which 50 percent must be paid up in cash. The rate of deposit intended for each branch of insurance required will be determined in regulations to be prepared by the Central Insurance of Iran, and approved by the High Council of Insurance.

Article 37

Registration of any insurance company in Iran will depend on presentation of Establishment Permit issued by the Central Insurance of Iran. Similarly, registration of any subsequent changes in the articles of association, amount of capital, and shares of insurance companies which have been registered will depend on presentation of the certificate of approval thereof issued by the Central Insurance of Iran.

Chapter 2- Issue of Permit

Article 38

For undertaking insurance operations in all fields a permit must previously be obtained in accordance with the regulations of this chapter, from the Central Insurance of Iran. In order to obtain the said permit the applicant must submit to the Central Insurance of Iran the following documents and information:

1. The Company’s articles of association.

2. Amount of capital of the company.

3. Directors, and their nationalities and the number of shares of each one of them.

4. The amount of cash and non-cash shares and manner of their payment.

5. Any other documents and information which the Central Insurance of Iran deems necessary for determining the financial and technical competency of the company and the good reputation of its directors.

Article 39

When a request for the issue of a permit has been submitted to the Central Insurance of Iran, the latter is bound within a minimum period of 60 days from the date of submission of the last document and information requested, and with due observance of the text of Section 1 of Article 17, to announce to the applicant the views of the General Assembly in writing on the acceptance or rejection of the request.

If the applicant has objections on the view announced, he can, within a period of 30 days, submit his objections to the Council of Ministers. The decision adopted by the Council of Ministers shall be final.

Chapter 3 – Cancellation of Permit

Article 40

An Insurance permit for all fields or specific fields will be cancelled in the following cases, after concurrence of the High Council of Insurance and the approval of the General Assembly of the Central Insurance of Iran:

Article 41

In cases where the company operates contrary to its articles of association or the laws and by- laws governing insurance operations, then on the proposal of the Central Insurance of Iran and the approval of the High Council of Insurance it will temporarily be prohibited from accepting insurance in specific fields.

Article 42

In cases where the permit of an insurance company has been cancelled in accordance with Article 40, the said company can, within 30 days, refer the matter to the Council of Ministers and request cancellation of the decision adopted.

The decision of the Council of Ministers shall be final.

Article 43

Notification of the issuance or cancellation of the permit of an insurance company, and the information which is necessary from the view-point of protecting the interests of insurers and the insured and their beneficiaries will be published, at the expense of the relevant company itself, by the Central Insurance of Iran in the Official Gazette and in one of the mass circulation newspapers of Tehran. In cases where the insurance company has branches or agencies in another town or towns, the above notice will also be published in one of the newspapers of such towns, in two separate issues of the same, with an interval of one month in between.

Article 44

In cases where the permit of an Insurance company is permanently cancelled for one or a number of fields, the Central Insurance of Iran, with the approval of the High Council of Insurance will transfer to the Iran Insurance Company all past records and documents relating to the rights and obligations (portfolio) of the said company, or make such other arrangements which will guarantee the interests of the insurers and the insured and their beneficiaries.

Chapter 4 - Regulations relating to foreign insurance companies

Article 45

As from the date of the approval of this Law, the start of operations by foreign insurance companies in Iran, will be subject to the proposal of the Central Insurance of Iran, the confirmation of the High Council of Insurance and the approval of the Council of Ministers.

Article 46

Foreign insurance companies must, according to regulations to be proposed by the Central Insurance of Iran and approved by the High Council of Insurance, deposit an amount with the Central Insurance of Iran for each one of two fields; i.e. life insurance and other kinds of insurance.

The amount of this deposit in each one of the two fields mentioned, will not be less than 500,000 Dollars or the equivalent amount in foreign exchange acceptable by the Central Bank of Iran.

Each foreign insurance company shall, year after year, add its income to the above-mentioned deposit, so that in each case the amount of the deposit reaches a minimum of twice the amount approved by the High Council of Insurance.

Increasing the deposit in excess of the above amounts shall then be voluntary.

Article 47

There shall be no obstacle to the transfer abroad of the income of foreign insurance organizations, after completing the deposit mentioned in Article 46, on condition that the amount transferred in each year does not exceed 10 percent of the amount kept as deposit with the Central Insurance of Iran.

Note

Arrangements for the transfer of income in excess of the deposit at the rate of 10 percent per year mentioned in this Article shall be subject to the proposal of the Central Insurance of Iran, confirmation of the High Council of Insurance and approval of the Council of Ministers.

Article 48

Foreign insurance companies operating in Iran must notify in writing the name of their representative who shall be resident in Iran and shall have adequate powers for administering all the operations of the organization in Iran, and carrying out the commitments on the part of the parent insurance organization. The said representative will be responsible for all the operations of the principal insurance organizations in Iran, and must possess a power of attorney which stipulates the limits of his powers and gives him the right to elect an authorized representative or a deputy in his own place.

It shall be obligatory for the above-mentioned representatives to sign all insurance policies concluded in Iran, personally or by means of his deputy or authorized representative without approval of the parent insurance organization being necessary, and he must also have authorization to act as a defendant or plaintiff in a court suit and have the right to delegate power to an attorney and be authorized to settle disputes by conciliation.

Article 49

The representative of the foreign insurance organization will limit his insurance operations in Iran to the extent of the powers granted to him by the parent insurance organization, and in cases where in any one of the insurance fields the parent insurance organization is deprived of its authority for insurance on a temporary or permanent basis, and/or the parent insurance company cancels part or all of the powers of its representative then the representative must inform the Central Insurance of Iran in writing of the matter.

Article 50

Foreign insurance companies in addition to being subject to the provisions of this law and the relevant by-laws, will also be subject to the general laws and regulation relating to foreign companies and organizations.

Section 2- Dissolution and Bankruptcy

Article 51

In cases where the bankruptcy of an insurance company is announced, the court shall, prior to any decision, ask for the views of the Central Insurance of Iran. The Central Insurance of Iran must within 15 days of the date of receiving the court’s inquiry, announce its views to the court in writing. The court will then make its decision with
due regard to the views of the Central Insurance of Iran.

Article 52

Cancellation of the permit of an insurance company for all insurance operations shall entail dissolution of the organization, and in such a case the provisions of Article 44 of this Law will be implemented.

Article 53

Settlement of the accounts of a bankrupt insurance company will be conducted according to the Commercial Law. In places where there is no Bankruptcy Settlement Department, the court will appoint the Central Insurance of Iran to deputize for the Bankruptcy Settlement Department, and in the area of jurisdiction of provincial courts where a Settlement Department has been set up, the Settlement Department will perform the settlement affairs with the assistance of the Central Insurance of Iran.

An Insurance Company may, with the agreement of the Central Insurance of Iran and approval of the High Council of Insurance, allocate all or part of its portfolio with all its rights and obligations, to one or a number of other authorized insurance companies.

Article 55

The request for transfer of the portfolio of on insurance company to other insurance companies will be published as a notice by the Central Insurance of Iran, twice at intervals of ten days in the Official Gazette and in one of the local mass circulation newspapers at the cost of the company making the transfer request.

Article 56

After expiration of three months from the date of the last notice, the Central Insurance of Iran will, in case it has full confidence that the transfer will not harm any of the rights of the Insured and their beneficiaries, announce its agreement to the transfer of portfolio in writing to the insurance company making the request.

Article 57

In cases where the Central Insurance of Iran’s agreement has been given to the transfer of portfolio, then this transfer will be valid for all the Insured and their beneficiaries from the date of transfer.

Article 58

One or a number of insurance companies can, with due observance of the provisions of Articles 55,56, and 57 and approval of the High Council of Insurance merge with another insurance company.

Article 59

The Central Insurance of Iran may, for the purpose of protecting the rights of the Insured and their beneficiaries, or by reason of economic consideration and with a view to safeguarding the interests of the insurance industry, with the confirmation of the High Council of Insurance, and approval of the General Assembly, oblige those insurance companies whose financial or administrative conditions are not satisfactory, to amalgamate with other insurance companies. And in cases where this amalgamation does not take place, the permit of that company whose financial or administrative conditions are not satisfactory will be cancelled under the provisions of this law.

The decision of the Central Insurance of Iran, in addition to being notified in writing to the respective companies, will also be published for the information of the public in the Official Gazette and in one of the mass circulation newspapers of Tehran, and if necessary, in one of the local newspapers in other cities.