Iranian Insurance Law and Regulatory Framework
This domain tests your grasp of the statutory and regulatory scaffolding around a claim: which body licenses the insurer, approves wordings and tariffs, licenses the loss adjuster, and what a court will treat as mandatory rather than contractual.
The statutory layer
- The Insurance Act 1316 (1937) is the general contract statute: formation, premium, the insured's disclosure duties, indemnity and the insurer's payment obligation. Adjustment practice is read against it.
- Compulsory motor third-party liability is governed by its own statute (1395/2016), which fixes the categories of damage, the minimum cover limits and the role of the guarantee fund for unpaid insurer obligations. A policy term that contradicts the mandatory limits is void to that extent.
The regulator
- The Central Insurance of Iran (CII) supervises the market under the Ministry of Economic Affairs and Finance: licensing insurers, brokers, agents and loss adjusters; approving policy wordings and tariffs; issuing directives and circulars.
- The Insurance Council (Shura-ye Bimeh) acts as the higher policy-making body for market rules.
- Adjusters practise under a CII licence and are bound by its conduct directives; an unlicensed report carries little weight.
Worked example
A motor insurer argues that its own generic policy wording caps property damage below the compulsory minimum. The claimant cites the compulsory statute. Reasoning: the statute is mandatory and the CII-approved tariff sets the floor, so the contractual cap fails to that extent and the adjuster assesses against the statutory limit, not the marketing document.
Traps that cost marks
- Importing English or London-market assumptions into a question governed by Iranian statute.
- Quoting a policy schedule while ignoring the CII-approved wording or tariff that overrides it.
- Forgetting that the Farsi wording prevails and that translation shades meaning.
- Treating CII circulars as advisory when they bind insurers.