Insurance Companies Exemption License Regulations No. 35 of 2010

Official Gazette Hashemite Kingdom of Jordan

Amman: Sunday, 8 Dhu al-Hijjah 1431 AH corresponding to 14 November 2010 AD.

Issue Number: 5064

Issued by the Prime Ministry - Official Gazette Directorate Website: www.pm.gov.jo

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Regulations No. (35) of 2010 Regulations for Licensing Exempted Insurance Companies and Regulating Their Activities Issued by the Board of Directors of the Insurance Commission pursuant to the provisions of Paragraph (b) of Article (24) and Paragraph (b) of Article (108) of the Insurance Activities Regulation Law No. (33) of 1999 and its amendments

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Article (1): These Regulations shall be known as the "Exempted Insurance Companies Licensing and Activity Regulation Regulations of 2010" and shall come into effect from the date of their publication in the Official Gazette.

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

• The Law: The effective Insurance Activities Regulation Law.
• The Company: The exempted insurance company registered in the Kingdom and authorized to conduct insurance activities outside it, and the phrase "Jordanian Exempted Company" shall be added to its name.
• Prior Approval: The approval stipulated in Item (1) of Paragraph (b) of Article (25) of the Law or any article amending or replacing it.

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Company Licensing

Article (3): The following conditions are required for licensing the Company: A- It must be registered in the Kingdom as a public joint stock company, a private joint stock company, or a limited liability company. B- Its minimum capital must not be less than the minimum capital specified in Article (4) of these Regulations. C- It must have a physical headquarters in the Kingdom.

Article (4): The minimum capital of the Company shall be as follows: A- The company conducting general insurance activities: 1,000,000 Jordanian Dinars (one million Dinars). B- The company conducting life insurance activities: 1,000,000 Jordanian Dinars (one million Dinars).

Article (5): A- The application for prior approval shall be submitted according to the form prepared for this purpose, including the following data: 1- The type and branches of insurance to be conducted. 2- The amount of capital. 3- The names of the founders or partners in the Company, as applicable, their chosen addresses for service, and the amount of each of their shares. 4- The name and address of the legal advisor during the establishment phase. 5- The name and address of the auditor during the establishment phase.

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6- The name and address of the actuary during the establishment phase. 7- The name and address of the bank authorized by the founders or partners in the Company, as applicable, during the establishment phase. B- The following documentary evidence shall be attached to the application: 1- The signed company establishment contract and its articles of association. 2- The minutes of the founders' meeting including the election of the founders' committee responsible for supervising establishment procedures and the authorized signatories during the establishment period, as applicable. 3- Detailed data about the founders or partners in the Company, as applicable, submitted to the Commission according to the form prepared by a decision issued by the General Manager for this purpose. 4- An economic feasibility study including at least the company's business plan, the activities it will conduct, its organizational structure, the types of risks to be underwritten, and its reinsurance arrangements. 5- Estimated financial data for the first three financial years of the Company's operation. 6- A certificate from the actuary including the following:

• His approval of the bases for calculating insurance premiums.
• The sufficiency of technical provisions and the ability to comply with the solvency margin in accordance with the provisions of Article (18) of these Regulations during the first three financial years of the Company's operation.
• His approval of the bases on which the information provided in accordance with Items (4) and (5) of this paragraph was prepared.

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7- A list of the proposed names for the position of General Manager or Director or Board of Directors in the Company, as applicable, and key employees therein, with a detailed statement including their qualifications and experience in accordance with the provisions of Article (33) of the Law, and a written declaration confirming that they meet the conditions stipulated in Articles (31) and (32) of the Law, and a commitment to inform the Commission in the event that they do not meet these conditions during the year, according to the form prepared for this purpose. 8- Evidence that the legislation of the host country where the insured risk is located does not object to the Company bearing the risk nor impose restrictions on it. 9- Evidence of payment of the prescribed fees and allowances in accordance with the systems and regulations issued for this purpose pursuant to the provisions of the Law. 10- Any data or documentary evidence or information requested by the General Manager. C- The applicant must provide a written declaration that all data and documentary evidence submitted in accordance with the provisions of paragraphs (a) and (b) of this Article are correct and consistent with the provisions of the Law, systems, and regulations issued pursuant to it, as applicable.

Article (6): A- The General Manager shall notify the applicant either of the completion of the application with all data and documentary evidence stipulated in Article (5) of these Regulations or of any deficiencies in this data and evidence within two weeks from the date of submission of the application. B- In case of deficiency, the applicant must complete this deficiency within a period not exceeding three months from the date of notification thereof; otherwise, the application shall be deemed automatically cancelled, and he shall not be allowed to submit another application before six months have passed from the date of cancellation of the application.

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Article (7): A- The General Manager shall submit his recommendation regarding the application to the Board within a period not exceeding twenty working days from the date of notifying the applicant of the completion of his application with all data and documentary evidence. B- The Board shall rule on the application within fifteen working days from the date of submission of the recommendation to it in accordance with the provisions of paragraph (a) of this Article or at the first meeting held by the Board. C- The Board shall issue its decision granting or denying prior approval, and in case of non-approval, the Board's decision must be reasoned. It may grant conditional approval subject to the realization of conditions it specifies or impose specific restrictions on the Company applying for the license. D- The Board's prior approval of the application shall be deemed automatically cancelled if all requirements necessary to obtain the license are not met in accordance with the provisions of these Regulations within one year from the date of granting prior approval.

Article (8): In the event of the Board's prior approval of the application in accordance with the provisions of Article (7) of these Regulations, the General Manager shall request the applicant to provide the necessary data and documentary evidence to obtain the license, including the following: A- Evidence of completion of all establishment procedures of the Company in the Kingdom. B- Evidence of the existence of a physical headquarters for the Company in the Kingdom. C- A certified document proving that the Company's capital has been deposited in a local bank or a foreign bank. In the event that the Company's capital is deposited in a foreign bank, the Company must provide certified deposit documents from a local bank. D- Any other requirements, data, documentary evidence, or information requested by the General Manager.

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E- A written declaration that all data and documentary evidence stipulated in paragraphs (a-d) of this Article are correct.

Article (9): A- In the event that all data and documentary evidence stipulated in Article (8) of these Regulations are completed, the Board shall issue a decision granting the license based on the General Manager's recommendation within fifteen working days from the date of submission of the recommendation to it or at the first meeting held by the Board. B- The Commission may request any additional information, documents, and data at any stage until the issuance of the license grant decision referred to in paragraph (a) of this Article.

Article (10): The General Manager shall issue the Company's license including its name, address, and the type and branches of insurance authorized for the Company to conduct, after payment of the prescribed fees and allowances for granting the license.

Article (11): The license period shall be one year, starting on January 1st and ending on December 31st of each year. In the event that the license is issued during the year, the license period shall start from the date of its issuance and end at the end of the same year.

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Article (12): The Company is obliged, before it commences its actual work, to obtain the approval of the supervisory authorities in the country where it will operate if those authorities require such approval, and to provide the Commission with evidence of obtaining such approval.

Article (13): The Company that has obtained a license to conduct insurance activities pursuant to the provisions of these Regulations is obliged to inform the Commission immediately of any changes to any of the data and information for which the Company was granted the license.

Renewal of Company License

Article (14): A- The Company must submit an application to renew its license annually, no later than forty-five days before the expiration date of the license, attached with the following: 1- A list of the names of the members of the Company's Board of Directors, its General Manager, and the authorized signatories on its behalf or the Director or Board of Directors in the Company, as applicable. 2- Reinsurance arrangements for the next financial year. 3- Estimated financial data for the next financial year. 4- A written declaration in accordance with the provisions of Item (7) of Paragraph (b) of Article (5) of these Regulations. 5- Any data or documents requested from the Company in accordance with the provisions of the Law, systems, regulations, or decisions issued pursuant to it, which the Company has not submitted during the year.

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6- Any other requirements, data, documentary evidence, or information requested by the General Manager. B- The applicant must provide a written declaration that all data and documentary evidence submitted in accordance with the provisions of paragraph (a) of this Article are correct and consistent with the provisions of the Law, systems, and regulations issued pursuant to it, as applicable.

Article (15): A- If the license renewal application is complete with all data and documentary evidence, the General Manager shall rule on the application by decision within ten working days from the date of submission of the application. In case of approval, the General Manager shall notify the Company thereof in accordance with the provisions of the Law, and the license shall be issued in accordance with the provisions of Article (10) of these Regulations, as applicable. B- In the event of rejection of the application referred to in paragraph (a) of this Article, or its incompleteness, or failure to submit a license renewal application in accordance with the provisions of Article (14) of these Regulations, the provisions of the Law relating to the suspension and cancellation of the license, as applicable, and the consequences thereof shall apply. C- The Company shall not issue any insurance documents after the expiration date of the license stipulated in Article (11) of these Regulations before obtaining confirmation that the license renewal has been approved.

Regulation of Company Activities

Article (16): The provisions of the Law, systems, regulations, and decisions issued pursuant to any of them shall apply to the Company in matters and cases not stipulated in these Regulations, to the extent that they apply to it.

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Article (17): A- The Company is obliged to provide the General Manager with its audited annual financial data within a period not exceeding two months from the end of its financial year or any longer period approved by the General Manager. B- The financial data referred to in paragraph (a) of this Article must include at least the following: 1- Statement of Financial Position. 2- Statement of Comprehensive Income. 3- Statement of Cash Flows. 4- Statement of Changes in Equity. 5- Underwriting Revenue Account. 6- Claims Cost Account. 7- Underwriting Profits (Losses) Account. 8- A report showing the actuary's evaluation of the Company's assets and liabilities as approved in the documents submitted with the license application. C- The Company is obliged to provide the General Manager with its semi-annual financial data during the first three years of its operation in accordance with the provisions of paragraphs (a) and (b) of this Article. D- The Company is obliged to provide the Commission with any forms, documents, or data requested by the host supervisory authorities within a period not exceeding one month from the date of providing such forms, documents, or data to the host supervisory authorities.

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E- The Company is obliged to provide the Commission with any documents or data related to its activities within the time period specified by the Commission for this purpose. F- The Company is obliged to apply International Accounting Standards.

Article (18): The Company is obliged to comply with the following: A- Applying the technical provisions instructions issued for this purpose by the supervisory authorities in the host country where it conducts insurance activities. The Company must comply with applying the technical provisions calculation bases instructions issued by the Commission in the event that there are no legislations in the host country for this purpose. B- Providing the General Manager with a certificate of sufficiency of all technical provisions on the date of the annual financial data. This certificate must be issued by an actuary licensed by the Commission or who meets all the conditions required to obtain a license from the Commission. C- Complying with the solvency margin instructions issued by the Commission. The General Manager must be provided with the solvency margin forms in effect every six months, attached with the financial data and certified by the independent auditor.

Article (19): A- The limited liability and private joint stock companies are obliged to comply with all provisions applicable to the exempted insurance company contained in the Companies Law and the Securities Law in effect, and the systems and regulations issued pursuant to either of them, as applicable.

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B- In implementation of the provisions of paragraph (a) of this Article, the limited liability and private joint stock companies must provide the General Manager with any requirements, documents, or data that they are obliged to provide to the Companies Control Department or the Securities Commission. C- The Company is obliged to provide the Commission with any forms, documents, or data requested by the host supervisory authorities within a period not exceeding one month from the date of providing such forms, documents, or data to the host supervisory authorities.

Article (20): A- The Company must keep the documents and records related to its activities at its headquarters in the Kingdom. In this case, it must ensure that the Commission can access these documents and records at any time and that they are sufficient for auditing and inspecting the Company's activities, whether by the Company's auditor or by the Commission. B- The General Manager may assign one or more employees of the Commission to inspect any of the Company's transactions, records, or documents inside or outside the Kingdom. The Company shall bear the expenses incurred in the event that the inspection is outside the Kingdom.

Article (21): The Commission may request the Company to provide certified Arabic translations of the documents submitted in accordance with the provisions of these Regulations and decisions issued pursuant to them, in the event that the submitted documents are in a language other than Arabic.

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Article (22): The provisions of these Regulations shall apply to any company wishing to add a license for one or more insurance branches to the branches it conducts, to the extent applicable.

Article (23): The Commission shall maintain a special register for the Company including all data and documentary evidence submitted in accordance with the provisions of these Regulations.

Article (24): The General Manager may delegate any senior employee in the Commission the authorities stipulated in these Regulations, provided that the delegation is written and specific.

Article (25): The General Manager shall issue the necessary decisions to implement the provisions of these Regulations.

Board of Directors of the Insurance Commission

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