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 After the Islamic Revolution in 1979, the work permission of foreign insurance agencies in Iran has been withdrawn and ten of the insurance companies were merged in Dana Insurance Co. Bimeh Markazi Iran, while having the responsibility of regulating, supervising and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
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