The Central Bank of Jordan has issued draft regulations for the licensing, regulating and supervising of insurance brokers.
Under the proposed rules, an insurance broking licence is to be granted for one of the two main types of insurance — life and non-life. A broking company may not practise both types of insurance together.
However, it is permissible to grant a license to practice both life and non-life insurance businesses, provided that the manager of insurance affairs or the persons performing brokerage business or the same employees thereof does not practise both types of insurance together.
Capital
The proposed conditions for licensing an insurance broker are that the broker must be a public joint stock company, a private joint stock company, or a limited liability company. The name of the insurance broking entity must show that the company is engaged in insurance broking. A licensed insurance broker must also have “suitable headquarters of its own” in Jordan.
The proposed capital requirements for an insurance broker must not be:
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Less than JOD5,000 ($7,050)
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For each branch of insurance, with a maximum of 6 branches within one main type of insurance
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Less than JOD7,500
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For each branch of insurance, with a maximum of 12 branches within one main type of insurance
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Less than JOD10,000
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For more than 12 branches within one main type of insurance
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The insurance broker may combine the work of an insurance broker with the work of a reinsurance broker and an insurance consultant, provided that no commission, fee, or any material compensation is collected from the insurance company or reinsurance company and the client for the same insurance subject matter.
The proposed regulations would allow the insurance broker to combine the work of insurance brokerage with that of any other insurance service provider, with specific contracts. The insurance affairs manager, the broker, or employees of the insurance broker are prohibited from being executives in an insurance company or any of the insurance service providers.