MP logo Meyer-Reumann & Partners
German Legal Expertise in the Middle East since 1981

Setting-Up an Insurance Company in the Kurdistan Region of Iraq

Guiding Principle

This article provides the information regarding the requirements and setting-up an insurance company in the Kurdistan Region of Iraq.

A. Introduction

Iraq has two regional governments – the government of Central Iraq and the Kurdistan Regional Government (KRG). Each regional government has its own laws, parliament and prime minister. As a result there are two insurance regulators in Iraq. In the Kurdistan Region license is issued by the Ministry of Finance (“Ministry”), whereas the insurance regulator for Central Iraq is called the Iraqi Insurance Diwan.

Both regulators have different rules and requirements. This article provides the information regarding setting-up an insurance company in the Kurdistan Region of Iraq.

In 2011 the Ministry has set its own conditions and regulations regarding the licensing procedure of insurance companies of all types in Kurdistan Region of Iraq. Based on the Regulation No. 19 of 26/12/2011 companies (local or foreign) wishing to register an insurance company has to provide the below listed requirements:

B. General Conditions

The following general conditions apply for all insurance companies (local or foreign) and their subsidiaries. For the licensing procedure, the company has to undertake the following steps:

  1. Submitting an application to the Committee of the Ministry (“Committee”) after the establishment of the company at the registrar of companies (“Registrar of Companies”).
  2. Payment of non-refundable application fee of five million Iraqi Dinars (“IQD”) (5,000,000) to the Ministry.
  3. Payment of 30% of the total profit at the end of each year to the Ministry as a minimum budget as approved by the General Directorate of Insurance.
  4. 50% of the staff of the insurance company should be citizens of the Kurdistan Region of Iraq during the period of the first three years. The staff should be trained on the activities of insurance business in courses and vocational training.
  5. Foreign companies should  have experience in the insurance industry of not less then ten (10) years and the company’s capital should be IQD 25.000.000.000 (Twenty-five billion) and should be paid in at one time. Local companies have to be joint stock companies with a minimum share capital of IQD 25,000,000,000 (Twenty-five billion) to be paid in two installments and within a period of two years for all types of insurance.
  6. The Committee grants the applicant a license specifying the type of insurance companies or its subsidiaries in accordance with field of the company and its financial and professional ability and according to the need of the Kurdistan Region of Iraq.
  7. The Committee issues its decision of granting the license within (60) days from the day of application.

C. Foreign Branch

For foreign companies, a branch is the most likely option to set up a company in the Kurdistan Region. The following information has to be submitted along with the application for obtaining an insurance license for a foreign branch:

  • Name of the company
  • State of the parent company
  • The nationality of the company
  • Company type
  • Share capital
  • Amount of annual income
  • Type of insurance
  • Number of employees of the company and its subsidiaries
  • Number of the branches of the company and its subsidiaries and their field of work.
  • Financial report of the last three years prior to application
  • The above information has to be certified
  • Power of attorney to a person who shall submit the application and do the follow-up.

D. Local Companies

The following information for local companies has to be submitted along with the application for obtaining an insurance license:

  • Name of the company
  • Type the company (should be a joint stock company)
  • Share capital
  • Insurance type
  • Number of subsidiaries in the Kurdistan Region of Iraq
  • Action plan
  • A memorandum of association which should contain the founding partners and a summary of their CVs
  • Sample of the company’s organization to be proposed by the company containing the name of the company and the CVs of the people who are intended to be hired by the company
  • Specifying the area of ​​cooperation with foreign and/or Arab insurance companies

E. Summary

The insurance licensing process in the Kurdistan Region is – compared to Central Iraq – still in an early stage. However, things are certainly developing. As the Kurdistan Region of Iraq is considered more stable than Central Iraq in terms of security issues, setting-up companies in the Kurdistan Region in general is – especially for foreign companies – considered a better option. With the new regulation of the Ministry for insurance business, certainly the insurance companies will expand more in future in the Kurdistan Region of Iraq.

April, 2013 Sali Jumah
Meyer-Reumann & Partners, Abu Dhabi Office
Share:
For free subscription send us your contact details to Lexarabiae@meyer-reumann.com