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insurance market in Iraq

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1 insurance market in Iraq on Sat Aug 06, 2016 1:22 pm

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Mirza Majid Khan *


insurance market in Iraq

By هيئة التحرير شبكة الاقتصاديين العراقيين
- Posted on 06/08/2016


The insurance market is in the old markets and Iraq was at the forefront of the insurance markets in the Arab world after Egypt, that had begun with foreign management, where he was managed by companies or branches or agents of an English or Italian or Indian companies or insurance companies from Arabic countries and of different nationalities.

All insurance business was monopolized by these companies.

The Iraqi Government and the private sector, of mostly foreign companies, which were mostly English, covering insurance services to the needs of these companies exclusively. Some of these companies were originally winning foreign insurance companies agencies.

After the growth and increasing economic activity in its various aspects, industrial and trade and service and agricultural sectors, and growing demand for insurance services, particularly with regard to the property and services of government agencies, and the resultant high expenditures on premiums paid to insurance companies turning to outside Iraq in the form of foreign currency, the Government in the 1950s the need to establish a national insurance company exclusively cover its issuing law No 56 of 1950 whereby national insurance company was established with a capital of 1 million dinars.

This law was followed by several amendments. Before this date founded an insurance company on behalf of an insurance company with a capital of Mesopotamia-/100.000 dinars (100 thousand dinars) to be 60% and 40% foreign capital Iraqi capital.

After having their national insurance company was founded more than Iraqi national capital company. In addition to these national companies there were 32 branches or insurance agency for foreign companies working together at that time and until 1959.

Due to increasing activity in the insurance sector, especially after the founding of the national insurance company, which played an important role in this regard, it became necessary to establish another national company is doing is different from its predecessors in promoting and increasing retention of Iraq from premiums produced inside Iraq and not transferred abroad through reinsurance which were these companies, plus access to the incoming payments from other States. So was released in 1960 the Iraqi reinsurance company Act number 21 of 1960. This development came after the cancellation of the insurance companies act and its amendments 74 number 1936 insurance agents leave system 25 1936 and enactment of new insurance number 49 year 1960.

These actions have encouraged the national capital to establish Iraqi insurance companies and reduce the number of branches and agencies of foreign companies because its the Act of new obligations, including: increased safeguards and accounting agencies to insurance companies, and the inadmissibility of any foreign company to work unless you establish a branch or agency within Iraq with the introduction of the principle of reciprocity. The results of this procedure to increase the number of national insurance companies to 9 Iraqi insurance companies including national insurance company and the insurer.

By law No 99 of 1964 has been nationalizing all seven insurance companies operating in Iraq as the branches and agencies of foreign companies, followed by later decisions of the merging companies the seven national insurance company nationalized and the insurance company. After the merge decisions remained in government insurance companies market only national insurance company specializing in general insurance business, the insurance company specialising in Iraqi life insurance business, the Iraqi reinsurance company specializing in reinsurance business. These companies were associated with General Insurance Corporation that was cancelled in 1987 following that these companies were connected to the Ministry of finance directly.

In 1998 the dissolved Revolution Command Council issued resolution number 192 on 3/12/1998 whereby companies act canceled insurance agencies numbered 49 year 1960. Combine this decision several paragraphs for the insurance sector in Iraq and which instruct 12/1999 regulating the insurance and reinsurance business in Iraq. And that help Insurance Regulation Act (10) of 2005.

He founded the first private joint stock company company Dar es Salaam in mid-2000 and was followed by several private companies, even to the present day, a total of 30 private companies and three State enterprises plus six insurance brokers.

With high oil prices and increasing global Iraq was expected to coincide with this high recovery of insurance market in Iraq, but the opposite has happened as premium rate achieved by the year 2000, specifically during the 1980 's was $500,000,000 annually and $360,000,000 return premiums rate and that rate dropped to $217,000,000 annually in 2015 as a total of premiums and lower premiums also return 70% which is very high. It should arrive in Iraq by 2015 to more than 3,000,000,000 and not plummet to 217,000,000.

Either their causes are numerous, most notably:

1. lack of attention and care of competent government agencies in this sector and neglect entirely.
2. double insurance awareness among the citizens.
3. issuance of insurance laws do not serve this sector correctly.
4. efficient insurance cadres exit out of Iraq or the reluctance of some of them to work in this sector due to aging and lack of alternatives.
5. weak IID in Iraq and not to activate cycle correctly.
6. Iraqi insurance society is very weak and doesn't do any real activities, administered from government officials, although it was founded according to the law on associations as one of civil society organizations.

Finally, in order to create an Iraqi insurance market and that goes back to the way it requires overcoming or bypassing the difficulties mentioned and that all insurance staff cooperate to achieve this goal.

* Managing Director, Dar es Salaam insurance company
Copyright network of economists. Allow republish provided indicate the source. 6/8/2016
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