“IRC can help promote corporate governance in the insurance industry, which would be an effective step in management reform in the insurance industry,” the IRC website quoted Hemmati as saying.
The CII chief also tasked the IRC to conduct the necessary training courses for insurance managers.
Compelling insurers to uphold the rules of transparency, management structure, and auditing and risk management principles is on the agenda of the insurance regulator. By promoting corporate governance, the CII is trying to create the conditions in which the CEOs can independently make informed choices and decisions.
Presence of independent non-executive members on the insurance companies’ boards is also among CII’s plans for addressing corporate governance issue.
Experts and observers, however, believe that promoting corporate governance should be accompanied by employing experts in risk assessment – an item not easily available in the local insurance market, reports Financial Tribune.
Role of Academia
He called for launching a specialized library to provide university students and experts with easy access to insurance-related resources. “We should encourage university students to undertake research projects on the insurance industry.”
According to one University of Tehran study, lack of written regulations specifically addressing the structure of insurance companies is the main barrier to implementing governance standards in the industry.
Trade Law and Insurance Law are the only rules insurers follow at the moment. Both these are old and fail to clearly define the roles and responsibilities of executives and board members, the research says.
It calls for a shift in the government’s approach toward corporate governance by employing the necessary tools to ensure the implementation of regulations.
Currently 30 insurance companies operate in Iran of which 29 are privately-owned. Iran Insurance Company, the only government insurer, dominates 45% of the insurance market.