The Central Bank of Jordan (CBJ) is preparing a draft insurance law aimed at regulating the contractual relationship between insurance companies and the insured, providing a stable legal foundation for these relationships, CBJ governor Dr Adel Sharkas, has said.
Speaking at the opening of an Arab symposium titled “Emerging Issues and Applications in the Arab Insurance Industry” on 30 June 2024, Mr Sharkas said that since the CBJ assumed oversight of the insurance sector, it has fostered a legislative environment that enhances prudent regulation. This includes improving the financial solvency and capital quality of insurance companies, enabling them to confront risks and provide sustainable protection for citizens and the economy.
The central bank has also updated the professional and ethical practice rules to build public confidence in the insurance sector.
The governor also stressed the importance of addressing distortions in compulsory motor insurance and working to overcome existing challenges to preserve the rights of the insured and insurance companies simultaneously.
Nat CAT
Addressing current challenges, Dr Sharkas talked about the increasing risks of natural disasters and climate change. He highlighted CBJ’s role in coordinating efforts to develop insurance solutions for residential and commercial facilities and state infrastructure against natural disasters. This includes launching the National Green Finance Strategy (2023-2028), aiming to position Jordan as a regional leader in sustainable financing and enhance the financial sector’s resilience to environmental and climate risks.
Dr Sharkas urged insurance companies to offer suitable financing solutions for environmental and climate risks, recognising their essential role in executing the green finance strategy.
Digital transformation
He also said the global trend towards digital transformation in the insurance sector, which enhances customer experience and sector efficiency.
CBJ, he said, has developed regulatory frameworks to license electronic insurance platforms and legal frameworks to support technological advancements, aiming for a qualitative shift in the insurance industry through technology.