Disclosure of Commissions and Fees

In the Name of Allah, the Most Gracious, the Most Merciful

[Logo of the Central Bank of Jordan]

Number: 1/17/ 2363 Date: 5 Jumaada al-Akhir / 1443 AH Corresponding to: 6 / 2 / 2022 AD

Dear Insurance Companies, Dear Insurance Service Providers,

Subject: Disclosure of Commissions and Fees

Following Circular No. (17/3/12554) dated 2021/08/18, which stipulates the obligation of insurance companies and insurance service providers to disclose to their clients any commission or fees related to the service provided, whether borne by the client or the insurance company, we wish to inform you of the mechanism for disclosing commissions and fees related to the service provided to clients as follows:

First: Insurance Companies

• The scope of disclosure includes specifying the percentage of all commissions and fees related to the insurance service (including bonuses, or any amounts or any other compensation related to the insurance contract), provided that the client is a party to the contract by which the insurance service was provided, which are received by each of the following, in addition to specifying whether they are borne by the client or the company:
  • Insurance agents
  • Insurance brokers
  • Bancassurance
  • Loss adjusters
  • Consultants
• The disclosure mechanism should be within the terms of the insurance contract and the insurance contract schedule (premium calculation schedule), with emphasis on the necessity of clarifying the basis for calculating the percentage, whether it is from the gross or net premium value, and the insurance contract schedule must show all components of the premium.
• The timing of disclosure begins from the negotiation stage and providing the insurance offer, and upon issuing, modifying, or renewing the insurance contract and its appendices, and when preparing the claim settlement report, where any other means of disclosure are considered additional means such as: SMS or email.

P.O. Box 37 Amman 11118 - Jordan • Phone: 4630301 • Fax: 4638889, 639730, 461330 • website: www.cbj.gov.jo • e-mail: info@cbj.gov.jo

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In the Name of Allah, the Most Gracious, the Most Merciful

[Logo of the Central Bank of Jordan]

Second: Insurance Service Providers

• The scope of disclosure includes specifying the percentage of all commissions or fees related to providing the insurance service (including those fees participating in profits or payments related to sales volume or any other compensation related to the insurance contract) which are received by each of the insurance service providers listed below, in addition to specifying whether they are borne by the client or the insurance company:
  • Insurance agents
  • Insurance brokers
  • Bancassurance
  • Loss adjusters
  • Consultants
• The scope of disclosure does not include commissions or fees agreed upon and received by the actuary, surveyor, insurance business management companies, underwriting agents, and reinsurance brokers.
• The disclosure mechanism should be linear within the documents provided to the client, and in case of inability to determine the percentage of commissions or fees, the calculation mechanism should be disclosed, with emphasis on the necessity of clarifying the basis for calculating the percentage, whether it is from the gross or net premium value.
• The required timing of disclosure begins from the negotiation stage and providing the insurance offer, and upon issuing, modifying, or renewing the insurance contract and its appendices, and when preparing the claim settlement report or contracting to provide insurance consulting services, where any other means of disclosure are considered additional means such as: SMS or email.

Please accept our highest respect,

The Governor Dr. Adel Al-Sharkas

P.O. Box 37 Amman 11118 - Jordan • Phone: 4630301 • Fax: 4638889, 639730, 461330 • website: www.cbj.gov.jo • e-mail: info@cbj.gov.jo