Instructions No. 1 of 2008 Regarding Licensing of Banking Insurance Activities and Their Regulation and Supervision

Instructions No. (1) of 2008 Instructions for Licensing Banking Insurance Activities and the Basis for Their Regulation and Supervision* Issued by the Board of Directors of the Insurance Commission**

Pursuant to the provisions of paragraph (Y) of Article (23), paragraph (A) of Article (24), and paragraph (B) of Article (108) of the Insurance Activities Regulation Law No. (33) of 1999 and its amendments.

Article (1): These Instructions shall be known as the "Instructions for Licensing Banking Insurance Activities and the Basis for Their Regulation and Supervision of 2008" and shall come into effect from the date of their publication in the Official Gazette.

Definitions

Article (2): A- The words and expressions contained in these Instructions shall have the meanings assigned to them in Article (3) of the Insurance Activities Regulation Law No. (33) of 1999 and its amendments, unless the context indicates otherwise. B- For the purposes of these Instructions, the following words and expressions shall have the meanings indicated below:

• The Law: The Insurance Activities Regulation Law currently in force.
• The Bank: The bank licensed to conduct banking activities under the provisions of the currently effective Banking Law and licensed by the Commission to conduct banking insurance activities in the Kingdom in accordance with the provisions of these Instructions and decisions issued pursuant thereto.

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• These Instructions were published in the Official Gazette on 15 May 2008, in Issue (4907) on page (1856). These Instructions were also amended by Instructions No. (11) of 2008, Amended Instructions for Licensing Banking Insurance Activities and the Basis for Their Regulation and Supervision No. (1) of 2008, published in the Official Gazette on 4 January 2009, in Issue (4945) on page (6605), and amended by Instructions No. (18) of 2010, Amended Instructions for Licensing Banking Insurance Activities and the Basis for Their Regulation and Supervision, published in the Official Gazette on 2 May 2010, in Issue (5028) on page (2525). ** After the dissolution of the Insurance Commission pursuant to the Law on Restructuring Government Institutions and Departments No. (17) of 2014, all powers of the Board of Directors of the Insurance Commission were transferred to the Minister of Industry, Commerce and Supply, and all powers of the Director General of the Insurance Commission were transferred to the Secretary General of the Ministry of Industry, Commerce and Supply.

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• Banking Insurance Activities: The Bank's act of selling and marketing insurance products designed, developed, and implemented by the Bank and the Company, whereby the Bank, on behalf of the Company, performs all or any of the activities listed in Article (6) of these Instructions, regarding the type and branches of insurance licensed for practice and within the limits of the agreement concluded with the Company.
• Certified Employee: An employee of the Bank who is certified in accordance with the provisions of these Instructions and decisions issued pursuant thereto to conduct banking insurance activities.
• Client: The person who holds a bank account with the Bank.

Licensing Conditions and Procedures and Renewal

Article (3): A- No bank shall conduct banking insurance activities, nor shall any company certify or authorize any bank to conduct banking insurance activities on its behalf, unless the Bank obtains a license from the Commission in accordance with the bases and conditions specified in the provisions of these Instructions and decisions issued pursuant thereto. B- It is required that the Bank conducting banking insurance activities have a banking insurance unit comprising a manager in charge of banking insurance activities and at least one certified employee. The Bank must not allow any of its employees to conduct any banking insurance activities unless they are a certified employee. C- It is required that the manager in charge of banking insurance activities and any certified employee meet the conditions for conducting banking insurance activities in the type and branches of insurance for which the Bank seeks a license, and that they be certified by the Commission for this purpose in accordance with the bases and conditions specified in the provisions of these Instructions and decisions issued pursuant thereto. D- If the Bank requests two licenses to conduct banking insurance activities, one for life insurance and the other for general insurance, the conditions for certification in one of the types must be met by the manager in charge of banking insurance activities, and the conditions for certification in the other type must be met by the certified employee in the banking insurance unit.

Article (4): The banking insurance unit shall perform the following activities: A- Proposing the Bank's strategy for conducting banking insurance activities and the necessary procedures for supervising their implementation and evaluation. B- Supervising all banking insurance activities conducted by the Bank and the certified employees performing these activities. C- Establishing procedures to ensure the Bank's compliance with the provisions of these Instructions and decisions issued pursuant thereto. D- Developing necessary plans for the continuous training of Bank employees working in the field of banking insurance.

Article (5): A- The Bank is licensed to conduct banking insurance activities in life insurance and/or general insurance on behalf of a maximum of two insurance companies, provided that the type of insurance required to be conducted by each company differs from the type of insurance conducted by the other company, and that a separate license is issued on behalf of each company individually. B- If the Bank requests a license to conduct banking insurance activities on behalf of a company that conducts both general insurance and life insurance, a separate license shall be issued for each type of insurance, and the Bank shall not be entitled to apply for a license to conduct banking insurance activities on behalf of another company. C- Notwithstanding the provisions of paragraph (A) of this Article, the Director General may approve granting a license to a Bank to conduct banking insurance activities for more than two insurance companies in the motor vehicle liability insurance branch, if necessity dictates. D- The Bank shall not be granted a license combining banking insurance activities, in accordance with the provisions of these Instructions and decisions issued pursuant thereto, with the activities of an insurance agent, insurance broker, reinsurance broker, consultant, actuary, loss adjuster, or any other insurance support service providers, in accordance with the provisions of the relevant Instructions and decisions. E- The license to conduct banking insurance activities shall be issued according to the type and branches of insurance for which licensing is requested. The license duration shall be one year, starting from the date of approval of the license and ending upon the expiration of the said period, unless the license is renewed in accordance with the bases and conditions specified in the provisions of these Instructions and decisions issued pursuant thereto.

Article (6): Banking insurance activities involve acting on behalf of the Company, within the limits of the agreement concluded with it, by performing all or any of the following activities related to the type and branches of insurance licensed for the Bank to conduct: A- Displaying and promoting the insurance products and services provided by the Company. B- Soliciting insurance applications and presenting insurance quotes prepared by the Company. C- Receiving insurance applications or requests to renew, modify, or cancel insurance policies. D- Receiving insurance premiums and remitting such premiums to the Company. E- Answering inquiries from the applicant, the insured, or the beneficiary, or referring such inquiries to the relevant employee in the Company. F- Receiving and forwarding correspondence exchanged between the Company, the insured, and the beneficiaries of insurance policies regarding compensation claims. G- Issuing, renewing, modifying, or canceling insurance policies without bearing any risks arising from the policy. H- Investigating and inquiring about risks covered by the insurance contract and settling undisputed claims on behalf of the Company without receiving special compensation for this.

Article (7): A- The Bank's license application shall be submitted by its legal representative according to the form prepared for this purpose, including the following data: 1- The name and address of the Bank applying for the license. 2- The name of the insurance company on whose behalf the Bank will conduct banking insurance activities. 3- The type and branches of insurance in which banking insurance activities are to be conducted. 4- The proposed name for the position of the manager in charge of banking insurance activities and the certified employees. B- The following documentary evidence shall be attached to the application: 1- A copy of the Bank's establishment contract and articles of association, or equivalent, if the Bank applying for the license is a branch of a foreign bank. 2- A copy of the authorization representing the Bank in submitting and signing the license application on its behalf. 3- A certified copy of the Bank's registration certificate with the official authorities in the Kingdom and the commercial registration certificate. 4- Approval from the Central Bank for the Bank to conduct banking insurance activities. 5- A work program for the first three financial years of the license, including at a minimum the following, and the Bank shall discuss it with the Commission upon request: - A description of the insurance products the Bank will offer and the methods of displaying and promoting them, attached with samples of these products. - The expected number of insurance policies to be issued and the expected premiums to be achieved. - A description of the marketing campaign the Bank will follow to promote insurance products and the details of this campaign. - Future plans for developing banking insurance activities in the Bank. - Initial written policies for the activities and procedures the Bank will follow to comply with the provisions of these Instructions and decisions issued pursuant thereto. - A training plan for Bank employees working in the field of banking insurance. 6- A certification request for each of the manager in charge of banking insurance activities and the employees who will conduct banking insurance activities, according to the form prepared for this purpose, including the data and attached documentary evidence stipulated in Article (10) of these Instructions. 7- A sample of the agreement to be concluded between the Bank and the Company, which shall be regulated according to the provisions of Article (11) of these Instructions. The Bank shall provide the Commission with an original signed copy of it and any appendices before the license is granted. The agreement shall come into effect from the date the Bank is granted the license and for a period of one year, ending with the expiration of the license, and shall not be renewed except by renewing the license. 8- Any requirements, data, documentary evidence, or other information requested by the Director General. 9- A written declaration that all data, documents, and documentary evidence submitted in accordance with the provisions of this Article are correct, signed by the person representing the Bank in submitting and signing the license application. 10- Proof of payment of the fees and allowances prescribed according to the systems and instructions issued for this purpose pursuant to the provisions of the Law.

Article (8): The following conditions must be met for the certification of the manager in charge of banking insurance activities at the Bank: A- Holding a university degree or an insurance certificate from any of the specialized institutes accredited by the Commission pursuant to a decision issued by the Director General for this purpose. B- Having practical experience of not less than two years in conducting insurance activities in the type of insurance required to be conducted. C- Meeting the conditions stipulated in Article (31) of the Law. D- Not having had their license/registration or certification for conducting activities as an insurance agent, insurance broker, reinsurance broker, actuary, consultant, loss adjuster, or any of the insurance support service providers canceled or suspended as a disciplinary penalty, or not having met the conditions for re-licensing/registration or certification from the authority that canceled or suspended the license/registration or certification. E- Passing the assessment prepared or approved by the Commission for this purpose.

Article (9): The following conditions must be met for the certification of the certified employee to conduct banking insurance activities at the Bank: A- Holding a university degree, diploma, or certificate in the field of insurance from any of the specialized institutes accredited by the Commission by a decision issued by the Director General for this purpose. B- Having practical experience of not less than three months in conducting insurance activities in the type of insurance required to be conducted, or undergoing an intensive training course conducted by the Company lasting not less than fifteen days in the branches of insurance required to be conducted. C- Meeting the conditions stipulated in Article (31) of the Law. D- Not having had their license/registration or certification for conducting activities as an insurance agent, insurance broker, reinsurance broker, actuary, consultant, loss adjuster, or any of the insurance support service providers canceled or suspended as a disciplinary penalty, or not having met the conditions for re-licensing/registration or certification from the authority that canceled or suspended the license/registration or certification. E- Passing the assessment prepared or approved by the Commission for this purpose.

Article (10): A- The Bank shall submit a certification request for the manager in charge of banking insurance activities or the employee who will conduct banking insurance activities according to the form prepared for this purpose, including the following data: 1- His name, nationality, and address. 2- The name of the insurance company on whose behalf the Bank will conduct banking insurance activities. 3- The type and branches of insurance in which banking insurance activities will be conducted. B- The following documentary evidence shall be attached to the application: 1- Two personal photographs. 2- A written declaration meeting the conditions stipulated in paragraphs (C) and (D) of Article (8) or paragraphs (C) and (D) of Article (9) of these Instructions, as appropriate, and undertaking to inform the Commission if these conditions are not met during the year, according to the form prepared for this purpose. 3- A copy of the passport or national ID card. 4- A certified copy of academic qualifications. 5- A copy of practical experience certificates. 6- A copy of training course certificates. 7- A copy of the employment contract concluded between the Bank and the person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities, or equivalent. 8- Any requirements, data, documentary evidence, or other information requested by the Director General. 9- A written declaration signed by the person required to be certified as a manager in charge of banking insurance activities or as an employee who will conduct banking insurance activities that all data and documents submitted in accordance with the provisions of this Article are correct. 10- Proof of payment of the allowances prescribed according to the instructions issued for this purpose pursuant to the provisions of the Law.

Article (11): The agreement concluded between the Bank and the Company must specify the obligations and rights of each party, including the following: A- The type and branches of insurance in which the Bank is entitled to conduct banking insurance activities in accordance with the provisions of the effective Instructions on branches and licenses for insurance activities. B- The duration of the agreement and the circumstances necessitating its termination. C- The powers granted to the Bank regarding conducting all or any of the banking insurance activities on behalf of the Company. D- The method for calculating the Bank's commission for banking insurance activities conducted on behalf of the Company. E- The general bases that the Bank must follow and adhere to regarding the marketing and sale of insurance products, advertising, use of its logo and the Company's logo, underwriting insurance policies, and issuing them on behalf of the Company. F- The Bank's obligation to transfer all insurance premiums collected from insurance policies issued on behalf of the Company to the Company's account in the manner agreed upon with it, including providing the Company with a periodic detailed statement of these premiums. G- Specifying the Bank branches that will conduct banking insurance activities and their areas. H- The bases to be followed by the Bank and the Company to ensure the protection of clients' rights in the event of the termination or expiration of the agreement. I- Allowing the Company to inspect and review the Bank's books and records organized and related to banking insurance activities in accordance with the provisions of Article (29) of these Instructions, and allowing the Bank to inspect and review the Company's books and records within the limits of the banking insurance activities conducted by the Bank on behalf of the Company, and how to obtain copies thereof. J- Stating the mechanism related to the qualification and training of employees conducting banking insurance activities at the Bank, ensuring their continuous training.

Article (12): A- In the event of a deficiency in the requirements, data, and documentary evidence to be submitted in accordance with the provisions of Articles (7) and (10) of these Instructions, the Director General shall notify the Bank, the license applicant, of this deficiency within a period not exceeding ten working days from the date of submission of the application. The Bank shall complete this deficiency within a period not exceeding sixty days from the date of notification; otherwise, the application shall be considered canceled, and the Bank shall not submit another application before three months have passed from the date of cancellation of the application. B- If the license application is complete with all requirements and documentary evidence or has been completed in accordance with the provisions of paragraph (A) of this Article, the Director General shall notify the Bank, the applicant, of the details of the assessment to be provided by the person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities, within a period not exceeding ten working days from the date of completion of the application. The assessment shall be conducted within a period not exceeding sixty days from the date of notification of the assessment details.

Article (13): A- If the person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities passes the assessment, the Director General shall notify the Bank, the license applicant, thereof in accordance with the provisions of the Law. The payment of the prescribed fees and allowances according to the instructions issued for this purpose shall be completed within a period not exceeding ten working days from the date of notification, under penalty of cancellation of the license application unless justified reasons acceptable to the Director General prevent this. B- If the person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities fails to pass the assessment stipulated in paragraph (A) of this Article, the Director General shall notify the Bank, the applicant, thereof in accordance with the provisions of the Law. The person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities shall, within six months from the date of submission of the certification application, pass the assessment according to any of the courses conducted for this purpose after paying the allowances prescribed according to the instructions issued for this purpose pursuant to the provisions of the Law; otherwise, the submitted certification application shall be canceled. No new certification application for this person to conduct banking insurance activities in the Kingdom shall be submitted unless they provide proof of enrollment in specialized courses in insurance activities lasting not less than fifteen hours. C- If the person required to be certified as a manager in charge of banking insurance activities or the employee who will conduct banking insurance activities fails to attend the assessment stipulated in paragraph (A) of this Article, the submitted certification application shall be canceled, unless a valid excuse acceptable to the Director General is provided. No new application for the certification of this person to conduct banking insurance activities in the Kingdom shall be submitted before three months have passed from the date of cancellation of the application.

Article (14): When studying the Bank's license application, the impact of its activities and operations on the insurance sector shall be considered. The Director General, based on their estimates and upon the proposal of the concerned directorate, may reject the application if negative or unacceptable impacts on the Jordanian insurance sector are identified.

Article (15): The license application submitted in accordance with the provisions of Article (7) of these Instructions shall be decided upon by a decision of the Director General within a period not exceeding fifteen working days from the date of completion of the payment of fees and allowances. The license letter shall be issued, the Bank shall be registered in the special register prepared for this purpose at the Commission, and the manager in charge of banking insurance activities and the employee at the Bank shall be certified.

Article (16): A- The Bank may submit a request to the Director General to suspend the processing of the certification application for the manager in charge of banking insurance activities or the employee who will conduct banking insurance activities, including the reasons necessitating this request and specifying the required suspension period, provided that this period does not exceed six months. B- If the Director General approves the request submitted in accordance with paragraph (A) of this Article, the time period stipulated in paragraph (A) of Article (12) of these Instructions shall be suspended. The processing of the certification application shall resume upon submitting a request to the Director General, and the running of this time period shall resume from the date of approval of the request to resume processing the certification application. C- The decision on the certification application for the manager in charge of banking insurance activities or the employee who will conduct banking insurance activities shall be made after resuming processing, in accordance with the provisions of Articles (12) and (13) of these Instructions. D- If a request is submitted to suspend the processing of the certification application for the manager in charge of banking insurance activities or the employee who will conduct banking insurance activities in accordance with the provisions of this Article, this request shall not affect the Bank's license application, subject to the provisions of paragraph (B) of Article (3) of these Instructions.

Article (17): The Bank shall complete the licensing procedures in accordance with the provisions of these Instructions and decisions issued pursuant thereto within a period not exceeding one year from the date of submission of the license application; otherwise, the application shall be considered canceled.

Article (18): The Bank shall comply with the following: A- Notifying the Director General of any change occurring in any of the data and information under which it was licensed within a period not exceeding five working days from the date of occurrence of this change, provided that this change is consistent with the provisions of these Instructions. B- Informing the Director General of the vacancy of the position of the manager in charge of banking insurance activities or the certified employee within a period not exceeding five working days from the date of vacancy, and filling the vacant position within a period not exceeding sixty days from the date of vacancy. The Director General shall be notified of the proposed name for the position of the manager in charge of banking insurance activities or the certified employee, and a certification request shall be submitted to the Commission in accordance with the provisions of the Instructions and decisions issued pursuant thereto. C- Notifying the Director General of any change occurring in any of the data and information related to the amendment of its establishment contract or articles of association related to banking insurance activities within a period not exceeding five working days from the date of the amendment.

Article (19): A- The Bank shall submit an application for license renewal annually, forty-five days before the expiration of its license period, according to the form prepared for this purpose, attached with the following: 1- Proof of the validity of the agreement concluded between it and the Company. 2- A statement including the name of the manager in charge of banking insurance activities and the certified employees. 3- A written declaration in accordance with the provisions of item (2) of paragraph (B) of Article (10) of these Instructions. 4- Any requirements, data, documentary evidence, or other information requested by the Director General. 5- A written declaration that all data and documents submitted in accordance with the provisions of this paragraph are correct. 6- Proof of payment of the allowances prescribed according to the instructions issued for this purpose pursuant to the provisions of the Law. B- In the event of a deficiency in the data and documentary evidence to be submitted in accordance with the provisions of paragraph (A) of this Article, the Director General shall notify the Bank of this deficiency within a period not exceeding ten working days from the date of submission of the application. The Bank shall complete this deficiency within a period not exceeding fifteen days from the date of notification. C- The Director General shall decide on the license renewal application stipulated in paragraph (A) of this Article within a period not exceeding fifteen working days from the date of completion of all requirements, data, and documentary evidence required by this Article. D- The Bank shall be obliged to cease conducting banking insurance activities if it fails to renew its license in accordance with the provisions of this Article.

Conditions and Procedures for Adding Branches to the License and Certification and Transfer

Article (20): A- The Bank may add one or more branches of insurance activities to the license granted to it by submitting a request according to the form prepared for this purpose. B- The Bank shall be granted approval to add the insurance branch according to the following conditions: 1- Providing proof of the Company's approval to add the requested insurance branch. 2- The manager in charge of banking insurance activities or the certified employee must meet the conditions stipulated in Articles (8) and (9) of these Instructions, as appropriate. 3- The manager in charge of banking insurance activities or the certified employee must pass the assessment prepared or approved by the Commission for this purpose in the insurance branch intended to be added. 4- Paying the allowances prescribed according to the instructions issued for this purpose pursuant to the provisions of the Law. C- The Bank shall provide the Commission with a copy of the amended agreement or a copy of the appendix to the amendment of the agreement concluded between it and the Company, signed appropriately, before deciding on the matter of adding the requested branch to the license granted to it. D- The provisions of Articles (12), (13), and (15) of these Instructions shall apply to the application submitted to add an insurance branch to the Bank's license, as appropriate.

Article (21): A- If the manager in charge of banking insurance activities or the certified employee leaves their job at the Bank, their certification with the Commission shall be suspended for a period not exceeding six months from the date of termination of their employment, and their certification shall be deleted after the expiration of this period. B- If the manager in charge of banking insurance activities or the certified employee transfers to another Bank during the suspension period of certification stipulated in paragraph (A) of this Article, they shall be exempt from submitting the assessment if the following conditions are met: 1- The banking insurance activities to be conducted by the manager in charge of banking insurance activities or the certified employee are in the same branches allowed for them to conduct by the Commission. 2- The Bank is licensed for the branches to be conducted by the manager in charge of banking insurance activities or the certified employee. C- The Bank shall submit a certification request on the form prepared for this purpose for the manager in charge of banking insurance activities or the certified employee who will transfer to work for it. In this case, the conditions and provisions of certification stipulated in these Instructions shall apply, as appropriate, and they shall be exempt from submitting the documents listed in items (1-6) of paragraph (B) of Article (10) of these Instructions.

Article (22): The provisions of Articles (8), (9), (10), (12), (13), (15), and (16) of these Instructions shall apply for deciding on certification applications for the manager in charge of banking insurance activities or the employee who will conduct banking insurance activities submitted after the Bank is granted the license to conduct banking insurance activities, as appropriate.

Conditions and Procedures for Suspension of License and Re-registration

Article (23): A- The Director General may suspend the Bank's license for the period they determine in any of the following cases: 1- Upon the Bank's request and after obtaining the Company's approval, with the suspension taking effect from the date of agreement between the Bank and the Company, and the Commission shall be notified of this agreement within a period not exceeding five working days. 2- In the event of the cancellation of the agreement concluded between the Bank and the Company, with the suspension taking effect from the date of cancellation of the agreement, and the Commission shall be notified of this cancellation within a period not exceeding five working days. 3- If the Bank does not conduct banking insurance activities or ceases to conduct them for a period of one year. B- The Bank shall not be allowed to conduct banking insurance activities and then suspend its license therefor, under penalty of legal liability. C- The Bank whose license has been suspended in accordance with the provisions of paragraph (A) of this Article may submit a request to re-register it in the special register prepared for this purpose, provided that it submits a written request according to the form prepared for this purpose, subject to the following provisions: 1- If the suspension period of the license does not exceed one year, the provisions of Article (19) of these Instructions shall be observed. 2- If the suspension period of the license exceeds one year, in addition to what is stipulated in item (1) of this paragraph, the Bank must provide proof that the manager in charge of banking insurance activities or the certified employee enrolled in specialized courses in insurance activities or participated in conferences or seminars in insurance activities lasting not less than fifteen hours during the two years preceding the submission of the application. 3- If the suspension period of the license exceeds three years, the license shall be considered canceled, and the Bank must submit a new license application in accordance with the provisions of these Instructions. D- Subject to the provisions of paragraph (B) of this Article, the Bank whose license has been suspended in accordance with the provisions of item (2) of paragraph (A) of this Article shall not be allowed to submit a request to re-register it in the special register prepared for this purpose unless it provides a certified copy of an agreement concluded between it and an insurance company according to the type and branches of insurance licensed for it, and pays the allowances prescribed according to the instructions issued for this purpose pursuant to the provisions of the Law. E- The request for re-registration shall be decided upon by a decision of the Director General within a period not exceeding fifteen working days from the date of completion of all data and documents required by this Article. F- The Bank whose license has been suspended in accordance with the provisions of this Article shall remain subject to the provisions of these Instructions throughout the suspension period. G- The suspension of the Bank's license in accordance with the provisions of paragraph (