Amended Instructions for Financial Solvency Requirements for Insurance Companies No. (11) of 2026

Issued by Decision of the Board of Directors of the Central Bank of Jordan No. (209) / 2026 dated 20/9/2026

Amended Instructions for Financial Solvency Requirements for Insurance Companies No. (11) of 2026

(7) of 2026

Instructions for Financial Solvency Requirements for Insurance Companies No. (7) of 2023

Amended Instructions for Financial Solvency Requirements for Insurance Companies No. (11) of 2026

In accordance with the provisions of paragraph (a) of Article (24) of Article (109) of the Insurance Companies Regulation Law No. (12) of 2021.

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Article (1)

These Instructions shall be cited as the "Amended Instructions for Financial Solvency Requirements for Insurance Companies No. ( ) of 2026" and shall be read together with the "Instructions for Financial Solvency Requirements for Insurance Companies No. (7) of 2023" cited hereinafter, and shall be applied as a single instruction from the date of their issuance.

Article (2)

Article (5) of the Original Instructions is repealed and replaced with the following text:

Article (5)

a. Available capital consists of the sum of Basic Capital and Additional Capital, as specified in the regulatory adjustments to the application of the provisions of Annex (1) to these Instructions.

b. When calculating financial solvency requirements for insurance company operations within the Kingdom:

1. Basic Capital must not be less than 75% of the Required Capital.
2. The sum of Additional Capital and Tier 2 Capital must not exceed 75% of the Required Capital.

c. When calculating financial solvency requirements for insurance company operations within the Kingdom and its branches outside the Kingdom:

1. Basic Capital must not be less than 100% of the Required Capital.
2. The sum of Additional Capital and Tier 2 Capital must not exceed 100% of the Required Capital.

d. Tier 2 Capital must not exceed 50% of Basic Capital.

e. No financial instrument may be included in Available Capital if it consists of more than one item or the same financial instrument.

f. Obtaining the prior written approval of the Central Bank is required for the inclusion of issued financial instruments within Additional Capital or Tier 2 Capital by the insurance company.

Article (3)

Article (8) of the Original Instructions is amended as follows:

a. The phrase "including technical provisions" in the opening of paragraph (a) is repealed and replaced with the following Additional Capital:

"The shortfall in the insurance company's provisions, including technical provisions, shall be deducted from Basic Capital."

b. Paragraph (b) is replaced with the following:

For the purposes of including financial instruments issued by the insurance company within Additional Capital or Tier 2 Capital, the conditions specified in Table (1) Annex to these Instructions are required as follows:

1. The instrument intended for inclusion in Additional Capital must meet the following conditions:

a. It must be issued and fully paid.

b. The holders' rights of the instrument must be subordinated to the rights of the insured and beneficiaries under insurance contracts, and to other creditors and holders of Tier 2 Capital instruments of the insurance company.

c. It must be unconditional and unsecured, without any guarantee from the issuer or any related party, and without any arrangements that could enhance its legal or economic priority over other creditors of the insurance company.

d. It must be permanent, with no maturity date, and its value cannot be adjusted.

e. It can only be repaid upon the issuer's request after a minimum of five years from the date of issuance. In the case of a call option, the following must apply:

1. Obtain the prior written approval of the Central Bank for its implementation.
2. The insurance company must not create any expectations that the call option will be exercised.

Unless the call option is exercised:

1. The insurance company must replace the redeemed instrument with capital of equal or better quality, under conditions that maintain the insurance company's ability to maintain sustainable income.
2. The simultaneous extinguishment of the old instrument and replacement with the new instrument is permitted, provided that the insurance company proves that its capital level remains above the prescribed limit after exercising the call option.
3. No repayment of any principal amount is permitted during the redemption or call option period, except with the prior written approval of the Central Bank.
4. The insurance company must not assume the Central Bank's approval or imply it to the market.

f. The payment of dividends or distribution of profits through distributable items must be observed as follows:

1. The insurance company has no right to cancel the payment of dividends or distribution of profits at all times, nor does the use of dividends or profits imply any right in the event of the insurance company's distress or the imposition of any legal restrictions that prevent the payment of obligations due, without affecting the insurance company's regulatory status.
2. The payment of dividends or distribution of profits related to the instrument must not be associated with a change in the insurance company's credit rating. Any consideration of payment of dividends or distribution of profits in the event of a credit rating downgrade (of the insurance company or the insurance group) is not permitted.

g. Instruments classified as long-term liabilities for accounting purposes, such as long-term bonds classified within capital, must have the property of absorbing losses, either through conversion to equity or through a write-off mechanism on Basic Capital, such that when the accumulated/rolling losses reach 30% of Basic Capital, these losses are written off on Basic Capital, and this part of losses shall have the following effects:

1. Reduction of the instrument's value in liquidation.
2. Reduction of the paid-in value, whether the call option was used or not.
3. Full or partial reduction of the instrument's distribution or interest value.

h. The insurance company must not have any relationship with any entity that controls it or has effective influence over it, unless the insurance company has already purchased the instrument directly or indirectly.

i. The instrument must not contain any features on the issuer that require compensation to the instrument holder, except for a new instrument issued at a lower price within a specific timeframe.

j. If the instrument was not issued by the insurance company or an operating entity within the holding company, for example, an entity with a special purpose (SPV) within the insurance group, the returns available to the holding company or operating entity must be immediately available and meet all the criteria for inclusion in Additional Capital.

l. Issuance premium (excess over par) is allowed for inclusion in Additional Capital. If this premium results from instruments included in Additional Capital, it shall be deducted from Additional Capital.

2. The instrument intended for inclusion in Tier 2 Capital must meet the following conditions:

a. It must be issued and fully paid.

b. The holders' rights of the instrument must be subordinated to the rights of the insured and beneficiaries under insurance contracts, and to other creditors of the insurance company.

c. The financial instrument must not be covered or guaranteed by the issuer or any related party, and must not be subject to any arrangements that could enhance its legal or economic priority degree compared to the rights of the insured, beneficiaries under insurance contracts, or other creditors of the insurance company.

d. Maturity:

1. Its original maturity must not be less than five years.
2. The portion of capital recognized within the instrument during the remaining five years of the instrument's life is subject to amortization according to the following schedule:

Remaining Maturity Period	Amortization Weight
Less than 1 year	0%
More than 1 year – 2 years	20%
More than 2 years – 3 years	40%
More than 3 years – 4 years	60%
More than 4 years – 5 years	80%
More than 5 years	100%

3. The financial instrument must not be subject to modifications that exceed its value or contain incentive conditions for early repayment.

e. It can only be repaid upon the issuer's request after a minimum of five years from the date of issuance. In the case of a call option on the insurance company, the following must apply:

1. Obtain the prior written approval of the Central Bank for its implementation.
2. The insurance company must not create any expectations that the call option will be exercised.

Unless the call option is exercised:

1. The insurance company must replace the redeemed instrument with capital of equal or better quality, under conditions that maintain the insurance company's ability to maintain sustainable income.
2. The insurance company must prove that its capital level remains above the prescribed limit after exercising the call option.

f. The holder of the financial instrument (investor) must not have the right to accelerate future financial payments (interest). Except in the event of liquidation or insolvency, the principal amount.

g. The payment of dividends or distribution of profits related to the instrument must not be associated with a change in the insurance company's credit rating. Any consideration of payment of dividends or distribution of profits in the event of a credit rating downgrade (of the insurance company or the insurance group) is not permitted.

h. The insurance company must not have any relationship with any entity that controls it or has effective influence over it, unless the insurance company has already purchased the instrument directly or indirectly.

i. If the instrument was not issued by the insurance company or an operating entity within the holding company, for example, an entity with a special purpose (SPV) within the insurance group, the returns available to the holding company or operating entity must be immediately available and meet all the criteria for inclusion in Tier 2 Capital.

j. Issuance premium (excess over par) is allowed for inclusion in Additional Capital. If this instrument led to the emergence of a surplus "not included in Additional Capital," it shall be included in Tier 2 Capital.

Article (4)

Annex (1) to the Original Instructions is repealed and replaced with the following Table (1) Annex to these Instructions.

Chairman of the Board of Directors of the Central Bank

Annex

Table (1)

Available Capital

Description	Balance
Basic Capital
Paid-in Capital
Declared Reserves
Legal Reserve
Voluntary Reserve
Other Reserves (with prior Central Bank approval)
Issuance Premium
Share Premium
Retained Earnings (Losses)
Minority Interests
Deducted
Proposed Dividends
Issuance Deductions
Treasury Shares
Shortfall in Insurance Company Provisions, including Technical Provisions
Total Basic Capital
Additional Capital
Financial Instruments Issued by the Insurance Company Meeting Inclusion Criteria in Additional Capital
Issuance Premium (Excess) of Financial Instruments Issued by the Insurance Company Included in Additional Capital
Total Additional Capital
Tier 2 Capital
Financial Instruments Issued by the Insurance Company Meeting Inclusion Criteria in Tier 2 Capital
Issuance Premium (Excess) of Financial Instruments Issued by the Insurance Company Included in Tier 2 Capital
Increase in Value of Real Estate Investments
Fair Value Reserve
Translation Differences of Foreign Currencies
Total Tier 2 Capital Before Applying the Limit
Deducted
The portion of Tier 2 Capital that exceeds 50% of Basic Capital
Recognized Tier 2 Capital
Total Additional and Tier 2 Capital Before Applying the Limit
Deducted
The portion of Additional and Tier 2 Capital that exceeds the prescribed limit
Recognized Total Additional and Tier 2 Capital
Deducted
Investments in financial and sister subsidiary companies
Total Available Capital

Note: The recognized Total Additional and Tier 2 Capital is determined according to Article (5) paragraph (b) or (c) of the Instructions.