INSURANCE

Historical  background  of  insurance  in  Iran   goes  back  to  80 years  ago  when  two Russian  companies   ventured  to  open  their  branch  offices,  and  following   that  Iran  Insurance   Company  was  established  as  the  first  independent  and  state   owned   insurance   market. In the  early  1970s  many   new   insurance   companies   were  established  and  at  the same  time  the  Law  establishing   Bimeh  Markazi  Iran (  Central  Insurance  of  Iran )  was   passed   in  the  Parliament.  After  the  Islamic   Revolution  in 1979, the  work  permission  of  foreign  insurance  agencies  in  Iran  has  been  withdrawn   and  ten  of the  insurance   companies  were  merged  in  Dana Insurance Co.  Bimeh  Markazi   Iran,  while  having   the   responsibility  of  regulating,  supervising  and  promoting  insurance   business  in  Iran, is  also  the  sole   reinsure  of  the  market  and  has  a  very  reputable  stand  in  the  Middle   East  and   various   markets  of  the  world.

According  to  the  Article  70  of  the  Law   establishing   Bimeh   Markazi   Iran  while   read  as  follows :

“ The  following   insurance   business  must  exclusively  be  effected   by  insurance  companies   authorized  to operate  under  this  law:

a)    Insurance   of  movable  or   immovable  properties  existing  in Iran.

b) Transport  insurance  for  imported   goods,  the  purchase   agreement  for  which has  been   concluded  in  Iran , or  for  which  the  documentary  credit   has  been  opened  in  Iran.

c)  Insurance   relating   to  foreign  workers  and  employees ( with  the  exception  of  life   insurance  and   personal  injury  insurance) for  the  duration  of  residence  in  Iran  of  such   workers  and  employees.

d)    Insurance  relating  to  Iranian  residents.

The  foreign  investor   may  obtain  all   types  of  insurance  coverage  in  Iran  from  four   insurance   companies:

- Iran      Insurance  Company

- Asia     Insurance  Company

- Alborz  Insurance  Company

- Dana   Insurance   Company

All  the  above  insurance  companies  are   supervised  by  Bimeh   Markazi  Iran . The    insurance    service   in   Iran    is    also   presented    by  insurance   agents  and    brokers   both  of  which  are  authorized   to  act  in  the market  after   passing  the  relevant   tests  and  receiving   the  licence   form  Bimeh  Markazi  Iran . Some   of  these   agents, at  present,  proceed  to  issue   policies   on  behalf   of  their   companies.  According   to  Article 71  of  the  same  Law,  all  insurance  companies  operating  in  Iran  are  required   to cede   25%  of the  total  acquired   policies   in non-life  and  50%  in  life   insurance   as  legal   cession  ( compulsory  cession ) . Furthermore,  the  insurance  companies  are  required  to  initially  propose 30%   of  all  their  reinsurance   contracts  to   Bimeh  Markazi   under  the same conditions  as  those   ceded  to  foreign  reinsures; however , Bimeh  Markai   has  full   authority  to accept   and/or   decline  such  offers.
The  insurance  companies  in  Iran  are  active  in  various  fields   in life  &   non- life   according   to  the  tariffs   which  are  approved  and  ratified  by  High  Council  of  Insurance .  The  main  types   of  the  policies  and  coveage  are  as  follows:

1)  Fire  and  allied   perils

2)  Marine  insurance  ( including  full  inland  and  air  transport )

3)  Motor  insurance :

     3.1   third  party  liability ( compulsory   coverage )

     3.2   motor  physical  damage

     3.3   new  T.P.L. Policy  according   to  the  Islamic  principles  namely

             “DEYEH”

     3.4   passenger  accident  of   vehicles

4)  Life  insurance  ( term - endowment - whole life  - annuity   group  and  individual )

5)   Personal  accident  ( group  and  individual )

6)   Aviation  ( hull - passenger - liability - cargo )

7)  Engineering   ( including  policies   of  Contractor  All  Risk ( C.A.R.)  and  Erection  All  Risk (  E.A.R.) and  Computer  coverage.

8)   Money  in  transit   and  safe

9)   Comprehensive  general  liability

10) Health  insurance   ( various  schemes   of  hospitalization)

11) Off- shore  and  in- shore   coverage

12) Export   insurance  ( including   commercial  risk

SOCIAL   SECURITY   SCHEME  

One   of  the   principal  insurance  costs  of  an  employer  is  that  of  social   insurance  for  his   employees.  Under  social   insurance   regulation, employers   are  required   to  insure  their  employees  with  the  Social  Insurance  Organization  ( S.I.O.) . Firms  operating  under   the   Law are   required  to insure  all  employees  whether   labourers or officers. However, coverage  has not yet been expanded to include all officers working in the private sector.

The  insurance provides benefits for  retirement, illness, industrial accidents,  marriage, pregnancy and child  birth.

Insurance premium:  The insurance premium is levied on the total of base salary or wages of the employee, but deduction of premium from family allowances, travel allowances and bonuses are not allowed. The total contribution is  30%  of  monthly  salary  as computed  above; the  employer  deducts 7% from the employee’s  pay and  adds 20% himself and the government contributes the remaining 3%. An additional  premium  of  3% is also payable by the employer for unemployment  insurance  which  has  recently  been  introduced  by  government  for  employees.  Foreign nationals employed by Iranian firms subject to social insurance must be insured in the same  manner as their Iranian counterparts.

General provision: Within 20 days after the close of the month, the employer must submit to the Ministry of Labour and  Social  Insurance Organization, Tehran, the following   documents:        

1.  Lists of employees, their  respective wages or salaries and amounts deducted;

2-    Payment of deducted  amounts together with his own contribution