Regulatory Alerts2023-06-05
Added · Updated
Minimum Capital Requirements for Insurance and Reinsurance Companies Instructions No. 6 of 2023
The Central Bank of Jordan issues Instructions No. 6 of 2023 establishing minimum capital thresholds for insurance and reinsurance entities. The directive sets the minimum capital at eight million dinars for general or life insurance companies, sixteen million dinars for those conducting both, one hundred million dinars for reinsurance companies, and one million dinars for registered companies. Existing licensed companies must submit a regularization plan within three months and achieve compliance by March 31, 2025.
In the Name of Allah, the Most Gracious, the Most Merciful
[Logo of the Central Bank of Jordan]
Ref: 99.7 / 3 / 17 Date: 5 / 6 / 2023 Corresponding to: 16 / 11 / 1444
Dear Insurance Companies,
Subject: Instructions on the Minimum Capital of Insurance and Reinsurance Companies for the Year 2023
Based on the provisions of paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021, we attach to you "Instructions on the Minimum Capital of Insurance and Reinsurance Companies No. (6) of 2023" issued pursuant to the Board of Directors' Decision of the Central Bank No. (2023/129) dated 2023/5/22.
Please accept our highest regards,
The Governor Dr. Adel Al-Sharkas
Copy / Jordan Union of Insurance Companies P.O. Box 37 • Amman 11118 Jordan • Tel: 4630301 Fax: 4638889 • Website: www.cbj.gov.jo • Email: info@cbj.gov.jo
[Logo of the Central Bank of Jordan]
Instructions on the Minimum Capital of Insurance and Reinsurance Companies No. (6) of 2023
Issued pursuant to the Board of Directors' Decision of the Central Bank No. (2023/129) dated 2023/5/22
Contents
| Subject | Page |
|---|---|
| Article (1): Citation | (2) |
| Article (2): Definitions | (2) |
| Article (3): Minimum Capital of Insurance Companies Engaged in General Insurance Activities | (2) |
| Article (4): Minimum Capital of Insurance Companies Engaged in Life Insurance Activities | (2) |
| Article (5): Minimum Capital of Insurance Companies Engaged in General and Life Insurance Activities | (2) |
| Article (6): Minimum Capital of Reinsurance Companies | (2) |
| Article (7): Minimum Capital of Registered Companies | (3) |
| Article (8): Special Provisions for Branches of Foreign Insurance and Reinsurance Companies | (3) |
| Article (9): Compliance of Insurance Companies | (3) |
| Article (10): Issuance of Decisions | (3) |
3 | 1
Article (1): Citation These Instructions shall be known as the "Instructions on the Minimum Capital of Insurance and Reinsurance Companies for the Year 2023," and are issued pursuant to the provisions of paragraph (a) of Article (24), paragraph (a) of Article (17), and paragraph (b) of Article (109) of the Insurance Activities Regulation Law No. (12) of 2021. They shall be effective as of 2023/5/22.
Article (2): Definitions a- The following words and phrases shall have the meanings specified below wherever they appear in these Instructions, unless the context indicates otherwise: 1- The Law: The Insurance Activities Regulation Law No. (12) of 2021. 2- Capital: Subscribed capital less issuance discounts.
b- The definitions contained in the Law shall apply wherever referenced in these Instructions, unless the context indicates otherwise.
Article (3): Minimum Capital of Insurance Companies Engaged in General Insurance Activities The minimum capital for an insurance company licensed to conduct general insurance activities across all its branches, collectively or individually, is set at eight million dinars.
Article (4): Minimum Capital of Insurance Companies Engaged in Life Insurance Activities The minimum capital for an insurance company licensed to conduct life insurance activities is set at eight million dinars.
Article (5): Minimum Capital of Insurance Companies Engaged in General and Life Insurance Activities The minimum capital for an insurance company licensed to conduct both general and life insurance activities is set at sixteen million dinars.
3 | 2
Article (6): Minimum Capital of Reinsurance Companies The minimum capital for a reinsurance company is set at one hundred million dinars.
Article (7): Minimum Capital of Registered Companies The minimum capital for a registered company is set at one million dinars.
Article (8): Special Provisions for Branches of Foreign Insurance and Reinsurance Companies A branch of a foreign insurance company or a branch of a foreign reinsurance company shall not be licensed unless the regulatory capital of the parent foreign insurance company or the parent foreign reinsurance company is not less than the capital of the insurance or reinsurance company specified under the provisions of these Instructions.
Article (9): Compliance of Insurance Companies In implementation of the provisions of paragraph (b) of Article (103) of the Law, insurance companies licensed prior to the enforcement of the Law's provisions shall comply with the following: a. Regularize their status within a maximum period ending on 2025/3/31 to reach the minimum capital requirement according to the provisions of Article (3), (4), or (5) of these Instructions, as applicable. b. Submit a plan to the Central Bank detailing the measures intended to be taken to regularize their status in accordance with the provisions of paragraph (a) of this Article within three months from the enforcement of these Instructions.
Article (10): Issuance of Decisions The Governor shall issue the necessary decisions to implement the provisions of these Instructions.
Board of Directors of the Central Bank