Iraq Insurance Laws

Insurance in Iraq

As conditions gradually improve in Iraq, queries are being received concerning opportunities in the insurance sector. This article provides a regulatory overview of the Iraqi market.

Statutory Overview

The operation of insurance in Iraq is governed by the Insurance Business Regulation Act 2005 (IBR). This act applies to all industry participants who wish to practice insurance business in Iraq.

Insurance business is widely defined in the IBR to include any activities of reinsurance, works of insurance professionals, acts of agents, intermediaries, the promoters of insurance contracts, claims evaluation, assessment, settlement, any transfer operations and any other activities related to an insurance contract. It is therefore likely that any insurance activities conducted in Iraq will fall within the terms of the IBR and be subject to regulatory supervision.

The Regulator

The IBR establishes the Iraqi insurance regulator, which is called the Iraqi Insurance Diwan ("Diwan"). The Diwan was established as an independent body that sets policies and procedures for the regulation of the insurance industry.

The objectives of the Diwan are to regulate and oversee the insurance sector, to assure industry development, provide industry transparency, protection of individuals and property and the accumulation and growth of national savings in order to support economic development.

To this end, the Diwan is given wide ranging powers with regard to insurance and is empowered to issue regulations concerning all aspects of the industry including insolvency, margins, minimum guarantees, technical reserves, reinsurance criteria, investments of funds, assets to be held and qualifications of industry participants.

Obtaining an Insurer's License

An insurer must be one of the following:

Iraqi public company Iraqi private or mixed holding companies Branches of foreign insurance companies registered in Iraq Takaful and Retakaful insurance entities The Diwan has power to authorise and grant licenses and the terms upon which licenses can be granted. Licenses are issued yearly and must be renewed. It also has the power to suspend and cancel licenses in the event of any breach of the IBR or regulations. No insurance business can be conducted without a license however the Diwan may grant permission for a new business to commence provided licensing requirements are completed within 90 days.

For foreign entrants a branch is the most likely option to set...