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The Central Insurance of Iran Establishment and Insurance Operation Act

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					Part 1: The Central Insurance of Iran Establishment

Section 1 – Establishment and Objectives

Article 1

For the purpose of regulating, expanding and guiding insurance operations in Iran, and for
guidance of the insurance companies, and the protection of the insured and their beneficiaries,
as well as to ensure government supervision of such operations, an organization named Bimeh
Markazi Iran ( the Central Insurance of Iran ) is hereby established in the form of a joint stock
company.



Article 2

The capital of the Central Insurance of Iran is 500 million Rials which is divided into 50
registered shares of 10 million Rials each, all of which belong to the Government and are non-
transferable; an increase in this capital is possible with the approval of the General Assembly.
The above sum will be supplied from the reserves of the Iran Insurance Company.



Article 3

The head office of the Central Insurance of Iran is in Tehran, and they can give to the Iran
Insurance Company representation or agencies anywhere they may feel necessary.



Article 4

The Central Insurance of Iran will not be bound by Iranian Public Laws relating to
Governmental Institutions and Organizations and those formed with Government Funds,
except in such cases where in the relevant law Central Insurance has been specifically named;
in cases where no provision has been made in this law, then Central Insurance will be subject
to the Commercial Law.



Section 2 – Duties and Powers

Article 5

The Central Insurance of Iran will have the following duties, responsibilities and powers :

1. To prepare by-laws and regulations and issue directives deemed necessary for the
promotion and proper execution of insurance operations in Iran, with due regard to the text of
this law.
2. To compile necessary information on the operations of all insurance organizations which
operate in Iran.

3. To effect compulsory reinsurance operations.

4. To effect facultative reinsurance from Iranian and foreign insurance organizations.

5. To cede reinsurance to Iranian and foreign insurance companies whenever it is deemed
necessary.

6.To administer the Bodily Injuries Indemnification Fund specified in Article 10 of the law
concerning Compulsory Third Party Liability by Owners of Land Motor Vehicles under the
Civil Law, approved in Dey 1347 (January 1969).

7.To guide, to lead and to supervise insurance companies and to afford protection to such
companies with a view to ensuring a sound insurance market; to regulate matters relating to
agencies and brokers; to supervise reinsurance matters and prevent unfair, deceitful and
unsound competition.

Note. The Central Insurance of Iran is obliged to guard and preserve the secrets of these
organizations which according to this law, it has the right to supervise.It shall not put any
information obtained by it, in implementing this law, to other uses but those specific in this
law.



Section 3 – Organs of the Central Insurance of Iran

Articles 6

The Central Insurance of Iran shall have the following organs :

1. General Assembly

2. High Council of Insurance

3. Management Board

4. Inspectors



Chapter 1 – General Assembly

Article 7

The General Assembly will be composed of the Ministers of Finance, Economy, and Labour
and Social Services. The Management Board and Inspectors will participate in the meetings
of the Assembly without having the right to vote.
Article 8

The ordinary General Assembly will be held once a year on the invitation of the President of
the Central Insurance of Iran, at the latest by the end of Shahrivar (September 21).

The extraordinary General Assembly will be held on the invitation of the President of the
Central Insurance of Iran, or on the proposal of the Members of the General Assembly, at
which time the President of the Central Insurance of Iran is obliged to issue written invitation
within ten days after receiving the proposal for holding of the General Assembly. Invitation
will stipulate the agenda of the meeting, the day, the hour and the location of the holding of
the meeting.

No subject can be discussed at the ordinary or extraordinary meetings of the General
Assembly unless it is expressly included in the agenda of that particular meeting.



Article 9

The duties of the General Assembly are as follows:

a) Determination of a general overall policy.

b) Scrutiny of and commenting on the annual report of the President of Central Insurance of
Iran.

c) Study and approval of the budget, balance sheet, and profit and loss account, and
arrangements for allocation of profits and dividends.

d) Approval of the administrative organization and of the financial and dministrative by-laws
of the Central Insurance of Ian.

e) Approval of the employment and personnel regulations with due observance of Section C
of Article 2 of the State Employment Law.

f) Election of inspectors.

g) Determination of the salaries of the President and Members of the Board of Management
and the fees of inspectors.

h) To make decisions on any subject which has been included in the agenda by the President
of the Central Insurance of Iran.



Chapter 2 – High Council of Insurance

Article 10

The High Council of Insurance will have the following persons as members:

1. President of the Central Insurance of Iran.
2. Deputy Minister of Economy.

3. Deputy Minister of Finance.

4. Deputy Minister of Labour and Social Affairs.

5. Deputy Minister of Cooperatives and Rural Affairs.

6. Managing Director of the Iran Insurance Company.

7. The Managing Director of one of the insurance companies, elected by the Syndicate of
Iranian Insurance Companies.

8. One expert in legal affairs, elected by the General Assembly.

9. One expert in insurance affairs, elected by the General Assembly.

10. One person experienced in insurance affairs, elected by the President of the Iranian
Chamber of Commerce, Industries and Mines.



Note. Members of the High Council of Insurance, subject of Section 7,8,9 and 10(above),will
be elected for a period of three years; they can be re-elected.



Article 11

The Chairmanship of the High Council of Insurance, without right of vote,will be vested in
the President of the Central Insurance of Iran and in his absence, with his deputy.

Article 12

Members of the High Council of Insurance, before starting their duties, shall take and oath on
the General Assembly that they will exercise utmost care and caution in performing their
duties in the High Council of Insurance, and that all decisions adopted will be in the interests
of the country, and that they will preserve the secret matters coming before the High Council
of Insurance or those becoming available to them.



Article 13

The meetings of the High Council will be held at least once a month on the invitation of the
Chairman of the High Council of Insurance and in case four of its members make a request
for a meeting in writing, the Chairman shall, within one week, invite the members of the High
Council to attend the meeting.
Article 14

The meeting of the High Council of Insurance will attain a quorum with the presence of a
minimum of six of its members; decisions adopted with a majority of five votes of those
present at the meeting will become valid and enforceable.

At the time of discussion and voting in respect of an insurance organization in which one of
the members of the High Council has an interest of any nature, that member shall not
participate in the voting.

Article 15

The minutes of the meetings of the High Council of Insurance shall be set down in a register
and signed by the Chairman of the High Council of Insurance, and kept in the offices of the
Central Insurance of Iran.



Article 16

The High Council of Insurance shall have a Secretariat whose organization will be approved
by the High Council. The Head and staff of the Secretariat will be from the staff of the Central
Insurance of Iran.



Article 17

The duties of the High Council of Insurance shall be as follows:

1. To consider and to comment on the issuance of Establishment Permits or cancellation of
such permits of insurance organizations in accordance with the provisions of this law, and to
make due recommendations to the General Assembly.

2. To approve the form of the balance sheet to be used by insurance organizations.

3. To specify the various types of insurance transactions, and general conditions to be
included in insurance policies, and to supervise reinsurance operations.

4. To determine the rate of commission and insurance premium relating to the various types
of direct insurance operations.

5. Providing guidance on insurance operations and the activities of insurance companies.

6. To consider and to comment on the report of the Central Insurance of Iran regarding the
operations and activities of insurance organizations in Iran, which shall be submitted at least
once every six months?

7. To comment on any proposals submitted by the Chairman of the High Council of
Insurance.
8. Performance of such other duties as determined for it by this law.



Chapter 3 – Management Board

Article 18

The Management Board of the Central Insurance of Iran shall be composed of the President,
Vice President and Deputies.



Article 19

The President and Vice President of the Central Insurance of Iran will be appointed on the
proposal of the Minister of Finance and the approval of the Council of Ministers by *Imperial
Farman (Decree); the Deputies will be appointed on the proposal of the President of the
Central Insurance of Iran, in concurrence with the Minister of Finance, and decree of the
Council of Ministers.



Article 20

The President and Vice President of the Central Insurance of Iran will be appointed for a
period of four years, and they will be eligible for re-appointment.



Article 21

The President is the highest executive and administrative position in the Central Insurance of
Iran.



Article 22

The duties and powers of the President are as follows :

a) To supervise the implementation of this law and its related by-laws.

b) To represent the Central Insurance of Iran vis-?�-vis persons and Government or private
authorities or organizations, courts, and other legal or non-legal authorities with the right to
delegate his power to settle differences by conciliation and other powers stipulated in Article
2 of the Civil Code.

c) To delegate part of his powers as well as right of signature to the Vice President or
Deputies or heads of departments and staff members and to determine their duties.
d) To present reports on the state of accounts and affairs of the Central Insurance of Iran to
the General Assembly.

e) To present reports on operations and activities of insurance organizations in Iran to the
High Council of Insurance.



Article 23

In the absence of the President of the Central Insurance of Iran, the Vice President shall
exercise the same duties and powers.



Chapter 4 - Inspectors

Article 24



The Central Insurance of Iran will have two inspectors with adequate knowledge and
experience in insurance operations and accounting, one will be proposed by the Minister of
Finance and the other by the Minister of Economy. They will be appointed for one year with
the approval of the General Assembly with the right of re-appointment.



Article 25

The inspectors will have the right to ask for an information from the Central Insurance of Iran,
but will not have the right to interfere in the affairs of the Central Insurance of Iran.

Investigation of the annual balance sheet will constitute the principal duty of the inspectors.
The balance sheet of the Central Insurance of Iran will be submitted to the inspectors one
month prior to the holding of the General Assembly in order that they may prepare their
comments and submit their views to the General Assembly.



Section 4 – Miscellaneous Provisions

Article 26

The president and other member of the Management Board during their term of office shall
not accept membership in other commercial companies and organizations, or hold posts in
other Government or private organizations.

Note. Teaching in universities and higher educational institutions, and accepting non-regular
posts or assignments in charitable, social and educational institutions are not subject to the
ruling of this Article.
Article 27

Financial documents, valuable and negotiable papers and checks of the Central Insurance of
Iran will be valid with two signatures.



Article 28

The Central Insurance of Iran will be authorized to keep its cash balances in the form of
current accounts and/or deposit accounts with the Iran Insurance Bank.



Article 29

Members of the High Council of Insurance, consultants and administrative members of the
High Council of Insurance, persons to whom the High Council of Insurance consults in the
execution of its duties, the President and other members of the Management Board and
inspectors and all the staff of the Central Insurance of Iran shall not reveal confidential
information which they obtain in performing their allotted duties; otherwise they will be liable
to the regulations of Article 138 of the General Penal Code.


Article 30

The Iran Insurance Company will continue to carry out its own operations according to its
articles of association with the exception of what, under Sections 1,2,3,6,7 of Article 5 of this
Law has been included as part of the duties and powers of the Central Insurance of Iran.

Government Ministers, government companies and organizations, municipalities, and any
other organizations where majority of the share of capital belongs to the Government or the
above management or the said organizations, must conclude their insurance requirements with
the Iran Insurance Company exclusively.

This order shall include the National Iranian Oil Company, the National Iranian Steel Mill,
Iran National Airlines, the Central Bank of Iran, the Industrial Development and Renovation
Organization of Iran, and the Agricultural Development Fund, except in case where the
General Assembly of any one of these organizations adopts another decision regarding their
insurance.



Note. The Government shall, within four months from the date of approval of this Law,
present the new articles of association of the above mentioned company (Iran Insurance
Company) to the joint parliamentary Finance and Employment Committee for approval.
Part II : Insurance Operation

Section 1 – Insurance Organizations

Chapter 1 – General

Article 31

Insurance operations in Iran will be carried out (with due observance of this Law) by Iranian
public joint stock companies (registered in accordance with the Commercial Law) all of
whose shares are registered shares.



Note 1. The operations of foreign insurance organizations shall be subject to the provisions of
Chapter IV of this Law.

Note 2. Determination of what operations shall be regarded as insurance operations will be
with the High Council of Insurance.



Article 32

The number of shareholders of an Iranian insurance organization must not be less than ten real
or legal persons.



Article 33

Any real or legal person cannot own more than 20 per cent of the shares of one Iranian
insurance organization. The limit of 20 per cent includes shares belonging to first descendants
of the owner of the shares.



Article 34

Those insurance organizations whose shares are held by the Government or the * *Pahlavi
Foundation are not subject to Article 31, 32 and 33.



Article 35

More than 20 per cent of the shares of Iranian insurance organizations cannot be transferred to
legal persons of foreign nationality, and such transfer can be made only with prior consent of
Central Insurance of Iran.
Article 36

Iranian insurance organizations shall be formed with a minimum capital of 100 million Rials,
of which 50 per cent must be paid up in cash. The rate of deposit intended for each branch of
insurance required will be determined in regulations to be prepared by the Central Insurance
of Iran, and approved by the High Council of Insurance.



Article 37

Registration of any insurance company in Iran will depend on presentation of Establishment
Permit issued by the Central Insurance of Iran. Similarly, registration of any subsequent
changes in the articles of association, amount of capital, and shares of insurance companies
which have been registered will depend on presentation of the certificate of approval thereof
issued by the Central Insurance of Iran.



Chapter 2- Issue of Permit

Article 38

For undertaking insurance operations in all fields a permit must previously be obtained in
accordance with the regulations of this chapter, from the Central Insurance of Iran. In order to
obtain the said permit the applicant must submit to the Central Insurance of Iran the following
documents and information:

1. The Company’s articles of association.

2. Amount of capital of the company.

3. Directors, and their nationalities and the number of shares of each one of them.

4. The amount of cash and non-cash shares and manner of their payment.

5. Any other documents and information which the Central Insurance of Iran deems necessary
for determining the financial and technical competency of the company and the good
reputation of its directors.



Article 39

When a request for the issue of a permit has been submitted to the Central Insurance of Iran,
the latter is bound within a minimum period of 60 days from the date of submission of the last
document and information requested, and with due observance of the text of Section 1 of
Article 17, to announce to the applicant the views of the General Assembly in writing on the
acceptance or rejection of the request.
If the applicant has objections on the view announced, he can, within a period of 30 days,
submit his objections to the Council of Ministers. The decision adopted by the Council of
Ministers shall be final.



Chapter 3 – Cancellation of Permit

Article 40

An Insurance permit for all fields or specific fields will be cancelled in the following cases,
after concurrence of the High Council of Insurance and the approval of the General Assembly
of the Central Insurance of Iran:

1. In the case of such a request by the permit holder.

2. In case where the insurance company has not started its operations one year after the
issuance of the permit.

3. In cases where the Central Insurance of Iran considers the financial state of the insurance
company to the such that it cannot meet its commitments, or it is proved to the Central
Insurance of Iran that the continued operation of the company is detrimental to the insured
and insurers and or their beneficiaries.



Article 41

In cases where the company operates contrary to its articles of association or the laws and by-
laws governing insurance operations, then on the proposal of the Central Insurance of Iran and
the approval of the High Council of Insurance it will temporarily be prohibited from accepting
insurance in specific fields.



Article 42

In cases where the permit of an insurance company has been cancelled in accordance with
Article 40, the said company can, within 30 days, refer the matter to the Council of Ministers
and request cancellation of the decision adopted.

The decision of the Council of Ministers shall be final.



Article 43

Notification of the issuance or cancellation of the permit of an insurance company, and the
information which is necessary from the view-point of protecting the interests of insurers and
the insured and their beneficiaries will be published, at the expense of the relevant company
itself, by the Central Insurance of Iran in the Official Gazette and in one of the mass
circulation newspapers of Tehran. In cases where the insurance company has branches or
agencies in another town or towns, the above notice will also be published in one of the
newspapers of such towns, in two separate issues of the same, with an interval of one month
in between.



Article 44

In cases where the permit of an Insurance company is permanently cancelled for one or a
number of fields, the Central Insurance of Iran, with the approval of the High Council of
Insurance will transfer to the Iran Insurance Company all past records and documents relating
to the rights and obligations (portfolio) of the said company, or make such other arrangements
which will guarantee the interests of the insurers and the insured and their beneficiaries.



Chapter 4 - Regulations relating to foreign insurance companies

Article 45

As from the date of the approval of this Law, the start of operations by foreign insurance
companies in Iran will be subject to the proposal of the Central Insurance of Iran, the
confirmation of the High Council of Insurance and the approval of the Council of Ministers.



Article 46

Foreign insurance companies must, according to regulations to be proposed by the Central
Insurance of Iran and approved by the High Council of Insurance, deposit an amount with the
Central Insurance of Iran for each one of two fields; i.e. life insurance and other kinds of
insurance.

The amount of this deposit in each one of the two fields mentioned will not be less than
500,000 Dollars or the equivalent amount in foreign exchange acceptable by the Central Bank
of Iran.

Each foreign insurance company shall, year after year, add its income to the above-mentioned
deposit, so that in each case the amount of the deposit reaches a minimum of twice the
amount approved by the High Council of Insurance.

Increasing the deposit in excess of the above amounts shall then be voluntary.



Article 47

There shall be no obstacle to the transfer abroad of the income of foreign insurance
organizations, after completing the deposit mentioned in Article 46, on condition that the
amount transferred in each year does not exceed 10 per cent of the amount kept as deposit
with the Central Insurance of Iran.

Note. Arrangements for the transfer of income in excess of the deposit at the rate of 10
percent per year mentioned in this Article shall be subject to the proposal of the Central
Insurance of Iran, confirmation of the High Council of Insurance and approval of the Council
of Ministers.



Article 48

Foreign insurance companies operating in Iran must notify in writing the name of their
representative who shall be resident in Iran and shall have adequate powers for administering
all the operations of the organization in Iran, and carrying out the commitments on the part of
the parent insurance organization. The said representative will be responsible for all the
operations of the principal insurance organizations in Iran, and must possess a power of
attorney which stipulates the limits of his powers and gives him the right to elect an
authorized representative or a deputy in his own place.

It shall be obligatory for the above-mentioned representatives to sign all insurance policies
concluded in Iran, personally or by means of his deputy or authorized representative without
approval of the parent insurance organization being necessary, and he must also have
authorization to act as a defendant or plaintiff in a court suit and have the right to delegate
power to an attorney and be authorized to settle disputes by conciliation.



Article 49

The representative of the foreign insurance organization will limit his insurance operations in
Iran to the extent of the powers granted to him by the parent insurance organization, and in
cases where in any one of the insurance fields the parent insurance organization is deprived of
its authority for insurance on a temporary or permanent basis, and/or the parent insurance
company cancels part or all of the powers of its representative then the representative must
inform the Central Insurance of Iran in writing of the matter.



Article 50

Foreign insurance companies in addition to being subject to the provisions of this law and the
relevant by-laws will also be subject to the general laws and regulation relating to foreign
companies and organizations.

Section 2- Dissolution and Bankruptcy

Article 51
In cases where the bankruptcy of an insurance company is announced, the court shall, prior to
any decision, ask for the views of the Central Insurance of Iran. The Central Insurance of Iran
must within 15 days of the date of receiving the court’s inquiry, announce its views to the
court in writing. The court will then make its decision with due regard to the views of the
Central Insurance of Iran.



Article 52

Cancellation of the permit of an insurance company for all insurance operations shall entail
dissolution of the organization, and in such a case the provisions of Article 44 of this Law will
be implemented.



Article 53

Settlement of the accounts of a bankrupt insurance company will be conducted according to
the Commercial Law. In places where there is no Bankruptcy Settlement Department, the
court will appoint the Central Insurance of Iran to deputize for the Bankruptcy Settlement
Department, and in the area of jurisdiction of provincial courts where a Settlement
Department has been set up, the Settlement Department will perform the settlement affairs
with the assistance of the Central Insurance of Iran.



Section 3–Transfer of Operations and Amalgamation

Article 54

An Insurance Company may, with the agreement of the Central Insurance of Iran and
approval of the High Council of Insurance, allocate all or part of its portfolio with all its rights
and obligations, to one or a number of other authorized insurance companies.



Article 55

The request for transfer of the portfolio of on insurance company to other insurance
companies will be published as a notice by the Central Insurance of Iran, twice at intervals of
ten days in the Official Gazette and in one of the local mass circulation newspapers at the cost
of the company making the transfer request.



Article 56

After expiration of three months from the date of the last notice, the Central Insurance of Iran
will, in case it has full confidence that the transfer will not harm any of the rights of the
Insured and their beneficiaries, announce its agreement to the transfer of portfolio in writing
to the insurance company making the request.



Article 57

In cases where the Central Insurance of Iran’s agreement has been given to the transfer of
portfolio, then this transfer will be valid for all the Insured and their beneficiaries from the
date of transfer.



Article 58

One or a number of insurance companies can, with due observance of the provisions of
Articles 55,56, and 57 and approval of the High Council of Insurance merge with another
insurance company.



Article 59

The Central Insurance of Iran may, for the purpose of protecting the rights of the Insured and
their beneficiaries, or by reason of economic consideration and with a view to safeguarding
the interests of the insurance industry, with the confirmation of the High Council of
Insurance, and approval of the General Assembly, oblige those insurance companies whose
financial or administrative conditions are not satisfactory, to amalgamate with other insurance
companies. And in cases where this amalgamation does not take place, the permit of that
company whose financial or administrative conditions are not satisfactory will be cancelled
under the provisions of this law.

The decision of the Central Insurance of Iran, in addition to being notified in writing to the
respective companies, will also be published for the information of the public in the Official
Gazette and in one of the mass circulation newspapers of Tehran, and if necessary, in one of
the local newspapers in other cities.



Section 4 – Various Regulations

Article 60

All property owned by insurance companies as well as the deposits mentioned in Article 36
and 46 shall be regarded as guarantees for the rights and claims of Insurers, the Insured and
their beneficiaries, and in cases of dissolution or bankruptcy of an insurance company, the
Insurers and the Insured and their beneficiaries will have priority over other creditors. Also in
this regard, among various insurance fields, priority will be given to holders of life insurance
policies.
Insurance organizations cannot, without the prior agreement of the Central Insurance of Iran,
give their proportion in place of rights or wages, and/or mortgage them, or subject them to
any kind of transaction with rights to reclaiming and receiving them back.

Official Notaries Public are obliged, when such transactions take place, to ask for the letter of
agreement and authorization of the Central Insurance of Iran and to enter its text in the
transaction document.



Article 61

Insurance companies are obliged to maintain technical and statutory reserves, and clearly
reflect the manner of using such reserves in their account books. The various kinds of
technical and statutory reserves for each of the insurance fields, and the amounts of such
reserves and the basis of their calculation, as well as arrangements for utilizing such reserves,
and the manner of evaluating moveable and immovable properties which represent the
reserves of insurance companies, will be determined by the High Council of Insurance.



Article 62

All insurance companies are obliged to prepare their balance sheets and profit and loss
accounts according to samples prepared by the Central Insurance of Iran and approved by the
High Council of Insurance. They shall submit copies of their balance sheet to the Central
Insurance of Iran after its proper approval by their own authorities.



Article 63

Insurance companies are obliged to publish their balance sheets in the Official Gazette and in
at least one mass circulation newspaper of ehran.



Article 64

Persons who have been condemned in Iran or abroad for committing crime, or robbery, or
misusing property or money entrusted to them or fraud, or issuing checks with no funds, or
embezzlement, or have been an accomplice in any of the above crimes and defaulting
bankruptcies cannot be the founders or directors of insurance companies. Similarly such
persons shall not be put in charge of insurance agencies neither shall they be allowed to act as
brokers.

Article 65

In cases where, on the verdict of the court, it becomes clear that the bankruptcy of an
insurance company has been due to the fault and fraud of a director or directors, and the
properties of the respective company are not adequate to pay off obligations, then the
directors will be responsible for paying the claims of Insurers and the Insured and their
beneficiaries.



Article 66

Insurance cannot be offered except by the following persons:

1. Insurance companies.

2. Insurance agencies.

3. Official insurance brokers.



Note. Any staff member or insurance agent who offers insurance must possess an identity
card issued by the respective insurance company. The name of the official broker of insurance
agent through whom the insurance has been offered must be mentioned in the insurance
policy.



Article 67

Insurance companies and official insurance agents and official brokers are responsible for
making good damages caused to others in the course of carrying out their duties where such
damage is due to their fault or negligence or that of their employees.



Article 68

A permit to act as an official insurance broker will be issued by the Central Insurance of Iran,
and the by-laws governing the work of official insurance brokers will be approved by the
High Council of Insurance on the proposal of the Central Insurance of Iran.



Article 69

Any insurance company which directly or through its agents effects insurance in a specific
field, or fields for which it has no permit will be obliged to make good the damages of the
party sustaining the loss or injury.



Note. Any real or legal person who, without having a permit from an insurance company
poses as an insurance agent and accepts insurance for any one of the fields of insurance will
be subject to the punishment stipulated in Article 238 of the General Penal Code.


Article 70

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 import goods, the purchase agreement for which has been
concluded in Iran, or for which the documentary credit has been opened in ran.

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 resident in Iran.



Article 71

All insurance companies which operate in Iran must insure with the Central Insurance of Iran
50 per cent of their direct insurance business in the field of life insurance, and 25 per cent of
their direct insurance in other fields. In its turn, the Central Insurance of Iran, with due regard
to the capacity of each of the insurance companies operating in Iran to deal with such business
and in the presence of equally favourable conditions being offered by each of such companies,
shall reinsure with the said insurance companies operating in Iran, all or part of such
compulsory reinsurance business which it receives from them.

Note. What insurance companies accept under the heading of reinsurance is not subject to the
provisions of this Article.



Article 72

The manner of allocating compulsory reinsurance business and the rate of commission, and
participation in the profits will be determined for each field of insurance by the High Council
of insurance.

Article 73

Insurance companies in Iran shall be obliged to reinsure with the Central Insurance of Iran
under the same terms and conditions as they effect reinsurance abroad, the equivalent of 30
per cent of the balance of the insurance effected directly by them in excess of the compulsory
reinsurance.

In cases where the Central Insurance of Iran, for any reason, refrains from accepting this, then
the said organizations will be free to undertake reinsurance outside Iran. Transfer of foreign
exchange on account of this 30 per cent will be subject to presentation of a document granting
permission for such transfer from the Central Insurance of Iran.



Article 74

Insurance companies whether Iranian or foreign, which up to the date of this law, have been
registered under previous regulations and are engaged in insurance business will not be
obliged to obtain a new permit for those fields in which they are operating, but in any case,
they are obliged within 18 months from the date of approval of this law to put their
corporations on a basis of full conformity with the provisions of this law, otherwise their
permit shall be cancelled.

The High Council of Insurance, with due regard to reasons given and other considerations
invoke or renew the above period once.



Article 75

Insurance companies which work in Iran will be recognized as members of the Iran insurance
Syndicate. The articles of association of this Syndicate will be drawn up by the Central
Insurance of Iran in consultation with the members of the Syndicate within a maximum of 6
months after the establishment of the Central Insurance of Iran, and will be approved by the
High Council of Insurance.



Article 76

Insurance companies which operate in Iran will be required to observe the instructions of the
Central Insurance of Iran, which will be issued within the limits of this law and the by-laws
relevant to it.



Article 77

All laws and regulations which conflict with the provisions of this law will become null and
void as from date of approval of this law.

The above law, with 77 Articles and 10 Notes, after being approved by the Senate on
29.3.1350 (June 19, 1971), was approved by the Majlis on 30.3.1350 (June 20, 1971).

* The requirement of Imperial Farman ( Decree ) was deleted from this act after establishment
of Islamic Republic.

** After establishment of Islamic Republic, the name of Pahlavi Foundation was changed to
Alavi Foundation.

				
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