Regulatory Alerts2025-01-02
Added · Updated
Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Contract for 2024
The Central Bank of Jordan issued Instructions No. (24) of 2024, effective January 1, 2025, mandating that insurance companies refund the unearned portion of the compulsory motor insurance premium to policyholders upon contract cancellation, provided the vehicle was not involved in an accident during the coverage period. The instructions require insurers to process these refunds immediately at the location where the cancellation occurs and to make this service available at all driver and vehicle licensing circles in the Kingdom. This directive supersedes Instructions No. (25) of 2010 while maintaining the validity of prior decisions until replaced.
CENTRAL BANK OF JORDAN
Central Bank of Jordan
Reference No.: 17/ 5166 Date: 30 Jumaada al-Thani 1446 AH Corresponding to: 31 December, 2024 AD
Dear Insurance Companies, Dear Jordanian Union of Insurance Companies,
Subject: Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Contract for 2024
Greetings,
Based on the provisions of paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021 and the provisions of paragraph (c) of Article (8) and paragraph (a) of Article (19) of the Compulsory Motor Insurance System No. (52) of 2024, we attach to you the "Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Contract No. (24) of 2024" issued pursuant to the decision of the Board of Directors of the Central Bank No. (2024/252) dated 2024/12/24.
Please accept our highest regards,
The Governor Dr. Adel Al-Sharkas
[Logo of the Central Bank of Jordan]
Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Contract No. (24) of 2024
Contents
| Subject | Page |
|---|---|
| Article (1): | 3 |
| Article (2): | 3 |
| Article (3): | 3 |
| Article (4): | 3 |
| Article (5): | 4 |
Article (1): These Instructions shall be titled "Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Contract for 2024". They are issued based on the provisions of paragraph (c) of Article (8) and paragraph (a) of Article (19) of the Compulsory Motor Insurance System No. (52) of 2024 and paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021. They shall come into force as of 2025/1/1.
Article (2): A- The words and phrases used in these Instructions shall have the meanings specified below, unless the context or circumstances indicate otherwise:
- The Law: The Insurance Activities Regulation Law No. (12) of 2021.
- The System: The Compulsory Motor Insurance System No. (52) of 2024.
B- The definitions of terms and phrases used in the Law and the System shall apply wherever they appear in these Instructions, unless the context or circumstances indicate otherwise.
Article (3): A- The insured shall be refunded a portion of the insurance premium corresponding to the remaining period of the compulsory insurance contract upon its cancellation for a vehicle that did not cause an accident during the insurance contract period in any of the cases stipulated in paragraph (a) and paragraph (b) of Article (8) of the System. B- The insurance company is obligated to refund the premium difference to the insured immediately upon cancellation of the compulsory insurance contract and through the same location where the contract is cancelled. C- The insurance company must provide the service of cancelling the compulsory insurance contract and refunding the premium difference in accordance with the provisions of paragraphs (a) and (b) of this Article at all driver and vehicle licensing circles in the Kingdom.
Article (4): The Governor shall issue the necessary decisions to implement the provisions of these Instructions.
Article (5): The Instructions for Refunding a Portion of Compulsory Insurance Premium Upon Cancellation of Compulsory Insurance Policy No. (25) of 2010, issued based on the provisions of the Compulsory Motor Insurance System No. 12 of 2010, are hereby repealed. However, decisions issued pursuant to the provisions of the aforementioned Instructions shall remain in force until they are repealed or replaced by others in accordance with the provisions of these Instructions.