The insurance sector reform in Iraq, was initially implemented with a view to privatize the various sects related to the insurance segment. In the preliminary stages of insurance sector reform in Iraq, we get to see three risk carriers or insurance companies, which were owned by the state.
We also get to see four insurance companies, which were privately owned. However, the insurance companies owned by the state were dissolved with a notion that the assets of the insurance companies, owned by the state could be used for other purposes of the country, which essentially was economic growth.
An overview of the insurance industry in Iraq:
In the year 2004, the insurance market in Iraq had the following three risk carriers. The three risk carriers were owned by the state.
Iraq Insurance Company or IIC.
National Insurance Company or NIC
Iraq Reinsurance Company or IR
The following risk carriers used to operate in the private sector. These four privately owned risk carriers were launched in accordance with the Law 21,1997.
Dar Al Salam
Al Ahlia Insurance
A few setbacks in the insurance sector in Iraq:
With regard to the risk carriers owned by the state, it was not confirmed whether the debt balance as well as credit accounts of the three companies namely, Iraq Insurance Company, National Insurance Company and Iraq Reinsurance Company were identified or not. Under UNSC Resolution of 1483, cash assets of the above three companies (Iraq Insurance Company, National Insurance Company, Iraq Reinsurance Company) were captured. The reason for doing so was that the government felt that the cash assets were the property of the Iraqi government and should therefore be utilized for the growth of the economy of the country.
Efforts were made by the government in Iraq, to reconstruct the dissolved risk carriers, which were owned by the state. A reinsurance program was launched to this effect .
Insurance sector reforms in Iraq consisted of restructuring the insurance market in the country. This insurance sector reform in Iraq was not aimed at integrating the insurance market but it was a means of privatizing the public utilities in the country. In addition to the privatization of the public utilities, privatizing the risk carriers (state owned) were also hoped for. This was however considered as against international law.
As a compliance to the insurance sector reform in Iraq, the “Office of the Regulator” was created. Also established was the Insurance Association of Iraq. It was felt by some that insurance sector reform in Iraq was not actually introduced to fulfill the requirements of the insurance market, nor was it introduced to rise up to the pressure exerted by the people who are insured. Few say that the insurance sector reform in Iraq was launched to reconstruct the entire structure from the beginning. The reform was not meant for neutralizing the effects which were imposed on the people as a result of the failure of insurance companies owned by the state.
Last Updated on : 26th June 2013