Instructions for Licensing Insurance Agents and Regulating Their Work and Responsibilities No. (10) of 2023

CENTRAL BANK OF JORDAN

Instructions for Licensing Insurance Agents and Regulating Their Work and Responsibilities No. (10) of 2023

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CENTRAL BANK OF JORDAN

Instructions No. (10) of 2023
Instructions for Licensing Insurance Agents and Regulating Their Work and Responsibilities Issued by the Board of Directors of the Central Bank Pursuant to the provisions of Paragraph (a) of Article (82) and Paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021

Contents

Subject	Page
Article (1): Citation	2
Article (2): Definitions	2
Article (3): Practice of Insurance Agent Activities	3
Article (4): Duties and Powers of Insurance Agents	4
Article (5): General Conditions for Licensing Insurance Agents	5
Article (6): Conditions for Licensing an Insurance Agent - Production and Non-Dedicated Issuance	7
Article (7): Special Conditions for Licensing a Dedicated Issuance Insurance Agent	9
Article (8): Insurance Agent License Application	12
Article (9): Licensing Procedures for Insurance Agents	13
Article (10): Changes to Data and Information	14
Article (11): Periodic Data	14
Article (12): Agency Contract	15
Article (13): Duties of the Insurance Agent	16
Article (14): Duties of the Insurance Company	18
Article (15): Professional Practice Rules and Ethics	20
Article (16): Insurance Agent Records	22
Article (17): Adding Insurance Branches to the License	23
Article (18): Branch Opening Requirements	23
Article (19): License Suspension	24
Article (20): Inspection of Insurance Agents	26
Article (21): Corrective Procedures and Administrative Penalties	26
Article (22): General Provisions	27
Article (23): Compliance	29
Article (24): Repeal	29

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CENTRAL BANK OF JORDAN

Instructions for Licensing Insurance Agents and Regulating Their Work and Responsibilities No. (10) of 2023

Article (1):
Citation
These Instructions shall be known as the "Instructions for Licensing Insurance Agents and Regulating Their Work and Responsibilities for the Year 2023" and are issued pursuant to the provisions of Paragraph (a) of Article (82) and Paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021. They shall be effective from September 1, 2023.

Article (2):
Definitions
A. The following words and expressions shall have the meanings assigned to them below unless the context indicates otherwise:

• The Law: The Insurance Activities Regulation Law No. (12) of 2021.
• Management Officer: The natural person licensed to practice agency activities in insurance and responsible for managing the insurance agency at the legal person insurance agent.
• Employee: The natural person approved by the Central Bank to practice agency activities in insurance as a production employee or issuance employee at the legal person insurance agent.
• Non-Dedicated Insurance Agent: The legal person whose primary purpose and main professional activity is not the practice of agency activities in insurance, and which includes both a non-dedicated production insurance agent and a non-dedicated issuance insurance agent.

B. The words and expressions contained in these Instructions shall have the meanings assigned to them in Article (2) of the Law, unless the context indicates otherwise.

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Article (3):
Practice of Insurance Agent Activities

A. The license for an insurance agent shall be granted in accordance with any of the following:

1. Insurance Agent - Production
2. Insurance Agent - Dedicated Issuance
3. Insurance Agent - Non-Dedicated Production
4. Insurance Agent - Non-Dedicated Issuance

B. A license shall be granted to a natural person for the following:

1. Practicing agency activities in insurance in one of the two types of insurance as an agent for only one insurance company.
2. Practicing insurance agent activities under benefit-defined contracts that include both types of insurance as an agent for one insurance company.

C. A license shall be granted to a legal person for the following:

1. Practicing insurance agent activities in life insurance and general insurance activities, provided that both types of insurance are not practiced simultaneously by the same Management Officers and Employees.
2. Practicing insurance agent activities under benefit-defined contracts that include both types of insurance by the same Management Officer and/or Employee.
3. Practicing insurance agent activities as an agent for up to two insurance companies, provided that the type and branches of insurance to be practiced differ for each company.

D. No person shall be granted a license that combines insurance agent activities with the activities of any other insurance service providers.
E. It is prohibited for a natural person insurance agent, a Management Officer, and an Employee at a legal person insurance agent to be a partner or have a work relationship with another insurance agent.
F. Subject to the provisions of Paragraphs (C) and (D) of Article (4) of these Instructions, a license as a non-dedicated production insurance agent or non-dedicated issuance insurance agent shall be granted to a legal person whose primary purpose and main professional activity is not the practice of agency activities in insurance.

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Article (4):
Duties and Powers of Insurance Agents

A. An insurance agent - production shall perform the duties and powers listed in items (1-5) below, and may perform all or any of the duties listed in items (6-7) below in accordance with the agency contract concluded with the insurance company:

1. Attracting persons to introduce them to the insurance company and the services it provides.
2. Attracting insurance applications and presenting insurance offers prepared by the insurance company.
3. Receiving insurance applications or requests to renew, modify, or cancel insurance contracts.
4. Answering inquiries from the applicant, the insured, or the beneficiary, or referring such inquiries to an insurance agent - issuance or the relevant employee at the insurance company, as appropriate.
5. Explaining the procedures the insured must follow in the event of the insured risk occurring.
6. Receiving insurance premiums against issuing a receipt, and remitting those premiums to the insurance company.
7. Receiving and forwarding correspondence exchanged between the insurance company, the insured, and beneficiaries regarding compensation claims.

B. In addition to what is stated in Paragraph (A) of this Article, an insurance agent - dedicated issuance shall perform the duties and powers listed in item (1) below, and may perform all or any of the duties listed in items (2-3) below in accordance with the agency contract concluded with the insurance company:

1. Underwriting and issuing insurance contracts or renewing, modifying, or canceling them in the branches and activities licensed for practice.
2. Investigating and researching risks covered by the insurance contract and assisting in negotiations between the company and the client regarding claims resulting from the occurrence of the insured risk, and settling undisputed claims on behalf of the insurance company without receiving special compensation for this.
3. Supervising an insurance agent - production and/or an insurance agent - non-dedicated production and/or an insurance agent - non-dedicated issuance, provided that they are agents for the same insurance company.

C. The powers of a non-dedicated production insurance agent are limited to what is stated in Paragraph (A) of this Article, within the following limits:

1. Practicing agency activities in insurance with applications and insurance contracts approved as benefit-defined contracts and coverage, in accordance with the decision issued by the Governor for this purpose, which includes restrictions, ceilings, and insurance branches for these contracts.
2. Practicing agency activities in insurance with applications and insurance contracts complementary to a good or service provided by a non-dedicated production insurance agent.

D. The powers of a non-dedicated issuance insurance agent are limited to what is stated in Paragraph (A) and item (1) of Paragraph (B) of this Article, within the following limits:

1. Practicing agency activities in insurance with applications and insurance contracts approved as benefit-defined contracts and coverage, in accordance with the decision issued by the Governor for this purpose, which includes restrictions, ceilings, and insurance branches for these contracts.
2. Practicing agency activities in insurance with applications and insurance contracts complementary to a good or service provided by a non-dedicated issuance insurance agent.

Article (5):
General Conditions for Licensing Insurance Agents

A. The following conditions must be met by the natural person insurance agent, the Management Officer, and the Employee:

1. The age must not be less than 18 years old at the time of submitting the license application or approval request.
2. Must be a resident in the Kingdom.
3. Must not have had their license or registration for practicing agency activities in insurance or any of the insurance service providers revoked or suspended as an administrative penalty, either as a natural person, a legal person, a Management Officer of a legal person, or an owner or partner in a legal person, and must not meet the conditions for re-licensing or re-registration from the authority that suspended or revoked the license.
4. Must pass the examination prepared or approved by the Central Bank for this purpose.

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5. No final judicial conviction for a misdemeanor involving moral turpitude or public morals, or for a felony, or must not be subject to insolvency proceedings or have a bankruptcy judgment issued against them without their reputation being restored.
6. Must not be responsible in any capacity, at the Governor's discretion, for a serious violation of any provisions of legislation related to financial activities.

B. The following conditions must be met by the legal person insurance agent:

1. Must be registered as a Jordanian company or a branch of a foreign company with the competent authorities in accordance with relevant legislation.
2. Subject to the provisions of Paragraph (F) of Article (3) of these Instructions, the purpose of the person required to be licensed as a production insurance agent or dedicated issuance insurance agent must be limited to practicing agency activities in insurance. The Governor may approve the practice of additional activities related to the licensed insurance agency activities.
3. The Management Officer at the legal person insurance agent - dedicated issuance or the legal person insurance agent - production must be licensed as a natural person in the insurance branches for which licensing is requested. And the Management Officer at the legal person insurance agent - non-dedicated production or legal person insurance agent - non-dedicated issuance must be approved to practice agency activities in insurance in the insurance branches for which licensing is requested.

C. Despite what is stated in item (4) of Paragraph (A) of this Article, the following are exempt from taking the examination:

1. An Employee in the event of transfer from one legal person agent to another legal person agent, provided the following conditions are met:
   a) The transfer occurs within a period not exceeding one year from the date of termination of employment. b) The agency activities in insurance to be practiced by this Employee are in the same insurance branches licensed or permitted by the Central Bank. c) The legal person insurance agent is licensed in the insurance branches that this Employee will practice.

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2. An applicant for licensing as a dedicated issuance insurance agent or approval as an issuance employee at a legal person agent, provided the following conditions are met:
   a) They were previously licensed as a dedicated issuance insurance agent and more than three years have not passed since the date of license suspension, or they were previously approved as an issuance insurance employee at a legal person agent and more than one year has not passed since the date of approval suspension. b) The agency activities in insurance for which licensing is requested are in the same insurance branches previously licensed by the Central Bank. c) The legal person insurance agent is licensed in the insurance branches that this Employee will practice.

3. An applicant for licensing as a production insurance agent or approval as a production employee at a legal person agent, provided the following conditions are met:
   a) They were previously licensed as an issuance insurance agent or production insurance agent and more than three years have not passed since the date of license suspension, or they were previously approved as an issuance insurance employee or production insurance employee at a legal person agent and more than one year has not passed since the date of approval suspension. b) The agency activities in insurance for which licensing is requested are in the same insurance branches previously licensed by the Central Bank. c) The legal person insurance agent is licensed in the insurance branches that this Employee will practice.

Article (6):
Special Conditions for Licensing a Non-Dedicated Production Insurance Agent and a Non-Dedicated Issuance Insurance Agent

The following must be met by a non-dedicated production insurance agent or a non-dedicated issuance insurance agent:
A. The natural person insurance agent and Management Officer:

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CENTRAL BANK OF JORDAN

1. Must hold a secondary school certificate, or a specialized professional certificate in insurance related to the type of license requested from an institution approved by the Governor. For the purpose of licensing to practice agency activities in the life premiums branch and/or the investment-linked insurance branch and/or the collective pension fund management branch, they must hold any of the following:
   a) A Bachelor's degree as a minimum in insurance, risk management, economics, finance, accounting, actuarial science, or other similar specialties approved by the Governor. b) Specialized professional certificates in life insurance, investment and securities, risk in services, wealth management and investment, or any professional certificate related to the nature of their work from institutions approved by the Governor.

2. Must meet any of the following:
   a) Practical experience of not less than one year in practicing insurance activities at an insurance company or in the activities of insurance service providers as an insurance agent or insurance broker, or at an insurance agent or insurance broker within or outside the Kingdom, provided that their experience in any of the insurance branches to be practiced is not less than six months. b) Completion of an intensive training course at the insurance company of not less than fifteen hours for each insurance branch for which agency activities are to be practiced, and not less than thirty hours for each insurance branch regarding the life premiums branch, the investment-linked insurance branch, and the collective pension fund management branch, and must present a certificate approved by the insurance company for this purpose.

3. Enrollment in specialized courses in insurance activities during the year preceding the date of submitting the license application, of not less than fifteen hours, in the event of a break from practicing insurance activities or insurance service activities for more than three years.

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B. The Employee:

1. Must hold a secondary school certificate, or a specialized professional certificate in insurance related to the type of license requested from an institution approved by the Governor. For the purpose of licensing to practice agency activities in the life premiums branch and/or the investment-linked insurance branch and/or the collective pension fund management branch, they must hold any of the following:
   a) A Bachelor's degree as a minimum in insurance, risk management, economics, finance, accounting, actuarial science, or other similar specialties approved by the Governor. b) Specialized professional certificates in life insurance, investment and securities, risk in services, wealth management and investment, or any professional certificate related to the nature of their work from institutions approved by the Governor.

2. Must meet any of the following:
   a) Practical experience of not less than six months in practicing insurance activities at an insurance company or in the activities of insurance service providers as an insurance agent or insurance broker, or at an insurance agent or insurance broker within or outside the Kingdom, provided that their experience in any of the insurance branches to be practiced is not less than three months. b) Completion of an intensive training course at the insurance company of not less than fifteen hours for each insurance branch for which agency activities are to be practiced, and not less than thirty hours for each insurance branch regarding the life premiums branch, the investment-linked insurance branch, and the collective pension fund management branch, and must present a certificate approved by the insurance company for this purpose.

3. Enrollment in specialized courses in insurance activities during the year preceding the date of submitting the approval request, of not less than fifteen hours, in the event of a break from practicing insurance activities or insurance service activities for more than three years.

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CENTRAL BANK OF JORDAN

Article (7):
Special Conditions for Licensing a Dedicated Issuance Insurance Agent

In addition to the conditions stipulated in Article (5), the following conditions must be met by a dedicated issuance insurance agent:
A. The natural person insurance agent and Management Officer:

1. Must hold a Bachelor's degree as a minimum, or a specialized professional certificate in insurance related to the type of license requested from an institution approved by the Governor. For the purpose of licensing to practice agency activities in the life premiums branch and/or the investment-linked insurance branch and/or the collective pension fund management branch, they must hold any of the following:
   a) A Bachelor's degree as a minimum in insurance, risk management, economics, finance, accounting, actuarial science, or other similar specialties approved by the Governor. b) Specialized professional certificates in life insurance, investment and securities, risk in services, wealth management and investment, or any professional certificate related to the nature of their work from institutions approved by the Governor.

2. Must meet any of the following:
   a) Practical experience of not less than two years in practicing insurance activities at an insurance company or in the activities of insurance service providers as an insurance agent or insurance broker, or at an insurance agent or insurance broker within or outside the Kingdom, provided that their experience in any of the insurance branches to be practiced is not less than one year. b) Completion of an intensive training course at the insurance company of not less than thirty hours for each insurance branch for which agency activities are to be practiced, and not less than sixty hours for each insurance branch regarding the life premiums branch and the investment-linked insurance branch, and must present a certificate signed by the insurance company for this purpose.

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3. Enrollment in specialized courses in insurance activities during the year preceding the date of submitting the license application, of not less than fifteen hours, in the event of a break from practicing insurance activities or insurance service activities for more than three years.
4. Must be dedicated to working in a suitable private office. The insurance company may provide the office for its agent outside the company's offices and branches, provided that the name of the insurance agent is clearly indicated on the office.

B. The Employee:

1. Must hold a Bachelor's degree as a minimum, or a specialized professional certificate in insurance related to the type of license requested from an institution approved by the Governor. For the purpose of licensing to practice agency activities in the life premiums branch and/or the investment-linked insurance branch and/or the collective pension fund management branch, they must hold any of the following:
   a) A Bachelor's degree as a minimum in insurance, risk management, accounting, or any of the specialties of the Faculty of Economics and Administrative Sciences and Finance. b) Specialized professional certificates in life insurance, investment and securities, risk in services, wealth management and investment, or any professional certificate related to the nature of their work from institutions approved by the Governor.

2. Must meet any of the following:
   a) Practical experience of not less than one year in practicing insurance activities at an insurance company or in the activities of insurance service providers as an insurance agent or insurance broker, or at an insurance agent or insurance broker within or outside the Kingdom, provided that their experience in any of the insurance branches to be practiced is not less than one year.

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CENTRAL BANK OF JORDAN

b) Completion of an intensive training course at the insurance company of not less than thirty hours for each insurance branch for which agency activities are to be practiced, and not less than sixty hours for each insurance branch regarding the life premiums branch and the investment-linked insurance branch, and must present a certificate signed by the insurance company for this purpose.
3. Enrollment in specialized courses in insurance activities during the year preceding the date of submitting the approval request, of not less than fifteen hours, in the event of a break from practicing insurance activities or insurance service activities for more than three years.

Article (8):
Insurance Agent License Application

A. The natural person submits the license application for practicing insurance agent activities in accordance with the form prepared for this purpose and issued by the Governor, including the data and attached required documentary evidence.
B. The legal person submits the license application for practicing insurance agent activities in the Kingdom in accordance with the form prepared for this purpose and issued by the Governor, including the data and the following attachments:

1. Application for licensing the Management Officer.
2. Application for approving the Employees to practice agency activities in insurance.
3. Signed copy of the company contract or articles of association, as appropriate.
4. Names of founders and partners.
5. Certificate of non-conviction for each owner and partner in the legal person issued by the competent authorities in the Kingdom and the country of residence during the last three years.
6. Written declaration stating commitment to the provisions of Articles (19-21) of the Law and a declaration of no conflict of interest with the insurance company for which they will be an agent, for each owner and partner in the legal person, and undertaking to inform the Central Bank immediately if any of the conditions therein cease to exist, in accordance with the form issued by the Governor for this purpose.

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7. Written declaration from the owner and partners in the legal person stating that none of them have been subject to revocation or suspension of a license to practice any of the insurance service providers as an administrative penalty, and that none of them meet the conditions for re-licensing or re-registration from the authority that suspended or revoked the license.
8. Any other data or documents requested to study the license application and verify the availability of the conditions and requirements stipulated in these Instructions and any other related legislation.

C. The applicant for licensing as a branch of a foreign legal person must provide the following in addition to the documents mentioned in Paragraph (B) of this Article:

1. Certified certificate of the foreign legal person's license to practice agency activities in insurance issued by the regulatory authority in the country of the headquarters.
2. No objection from the regulatory authority in the country of the headquarters to opening a branch in the Kingdom.

Article (9):
Licensing Procedures for Insurance Agents

A. The applicant is notified either of the completion of the application with all required data and documentary evidence or of any deficiencies within a period not exceeding twenty working days from the date of submitting the application.
B. The applicant is subject to an examination within a period not exceeding sixty days from the date of notification of completion of the application in accordance with Paragraph (A) of this Article, and the applicant is notified of the examination results.
C. In the event of deficiencies, the applicant must complete these deficiencies within a period not exceeding sixty days from the date of notification. Otherwise, the application is considered cancelled, and the applicant may not submit another application before three months have passed from the date of cancellation.
D. The license application submitted in accordance with the provisions of these Instructions is decided upon by a decision of the Governor within a period not exceeding sixty working days from the date of completion of the requirements by the applicant.
E. In the event that the Governor's decision approves the licensing of the applicant, they are registered as an agent in the special register prepared for this purpose at the Central Bank after submitting proof of completing the establishment and registration procedures with the competent authorities in the Kingdom, as appropriate, and paying the prescribed fees and allowances in accordance with the legislation issued for this purpose under the provisions of the Law.

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F. In the event that the applicant does not pass the examination stipulated in Paragraph (B) of this Article, the applicant is notified thereof. The applicant must pass the examination within three months from the date of submitting the application and has the right to retake the examination a maximum of two times after paying the allowances prescribed in accordance with the prevailing legislation. Otherwise, the submitted license application is cancelled, and the applicant may not apply for a new license to practice insurance agent activities in the Kingdom until one year has passed and they submit proof of enrollment in specialized courses in insurance activities or insurance service activities of not less than fifteen hours.

Article (10):
Changes to Data and Information

A. The insurance agent is obligated not to make any changes that affect the conditions under which the license was granted or changes to the commercial register or company register with the Companies Control Department without obtaining prior approval or no objection from the Governor, under legal liability. B. The insurance agent is obligated to inform the Central Bank of any change, modification, renewal, or cancellation that occurs in the agency contract concluded between them and the insurance company within a period not exceeding ten working days from the date of the change, modification, renewal, or cancellation. They must cease practicing their activities in the event of the contract's expiration, cancellation, or non-renewal upon receiving written notice from the insurance company regarding this matter.
C. The legal person insurance agent must inform the Central Bank when the position of the General Manager or any of the Management Officers becomes vacant, or when the position of any of the Employees becomes vacant, and must fill the vacant position within sixty days from the date of vacancy, after obtaining prior approval from the Governor in accordance with the provisions of these Instructions and decisions issued pursuant to them.

Article (11):
Periodic Data

A. The insurance agent must provide the Central Bank with a statement of the activities practiced as an agent for the insurance company in accordance with the forms issued by decision of the Governor and the deadlines specified therein.
B. The insurance agent must provide the Central Bank with the following data in accordance with the periodicity and deadlines specified by decision of the Governor:

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CENTRAL BANK OF JORDAN

1. Recent certificate of non-conviction.
2. Copy of the national ID card for Jordanians or passport.
3. Copy of the residence permit and work permit, as appropriate.
4. Recent copy of the commercial register or company registration certificate with the Companies Control Department, as appropriate.
5. Proof of specialized courses in insurance activities or conferences or seminars in insurance activities or insurance service activities in which the insurance agent and the Employees working for them participated.
6. Written declaration of no conflict of interest and commitment to the provisions of Articles (19-21) of the Law, for each natural person insurance agent, owner, partner, Management Officer, and Employees at the legal person agent, in accordance with the forms prepared for this purpose.
7. Clarification of the detailed address of the office location and providing a recent copy of the office lease contract, as appropriate.

C. The insurance company must provide the Central Bank with the following data in accordance with the periodicity and deadlines specified by decision of the Governor:

1. List of names of its agents, and the Management Officers and Employees at each.
2. Statement including the activities practiced by each of its agents in accordance with the forms issued by decision of the Governor.

Article (12):
Agency Contract

The agency contract concluded between the insurance agent and the insurance company must specify the obligations and rights of each party, including the following:
A. The scope of the insurance agent's authority and duties, and the duties and powers of the insurance agent. It is required as a minimum to include items (1-5) of Paragraph (A) of Article (4) of these Instructions for a non-dedicated production insurance agent, and to include as a minimum items (1-5) of Paragraph (A) and item (1) of Paragraph (B) of Article (4) of these Instructions for a non-dedicated issuance insurance agent. B. The type and branches of insurance in which the agent is permitted to practice agency activities in accordance with the provisions of prevailing related legislation.

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