“The Regulatory Challenge” By Dr. Bassel Hindawi Director General of The Insurance Commission of Jordan at The 42 nd Annual Seminar of the International Insurance Society Chicago - USA 17 July 2006

 Consultation with the Industry  Regulatory Cost  Cooperation among Regulators  Corporate Governance  Regional Overview OUTLINE

 Insurance regulator is entrusted to maintain an open, transparent, and competitive business environment, while maintaining consumer protection  Regulations should be carefully drafted, taking into account industry input  Active participation by insurance institutions in policy setting  Effective regulation requires a shared vision between regulators and regulated businesses  Forum for global insurance industry, i.e. IIS Consultation with the Industry

 The financial cost of regulations is an inevitable factor in sustaining the efforts of the industry and regulators  Regulation has an impact on social welfare  Insolvency costs and market corrections and distortions compose two main factors in the regulatory effect on market efficiency  Prudential regulatory approach could substantially reduce market costs Regulatory Cost

 Dynamic changes within the insurance industry intensified the need for international cooperation among insurance regulators  Regulators should be receptive to changes within the industry as a whole on the global level  IAIS standard setting on effective supervision leads to maintaining efficient, fair, safe, and stable insurance markets  Mutual recognition is a useful tool towards the harmonization of different legislative systems Cooperation among Regulators

 Sound and healthy financial system requires better understanding of good governance systems and sound risk management techniques  Regulators are required to enhance transparency, responsibility and authority of law  Industry adaptation of good corporate governance principles will contribute significantly to financial stability Corporate Governance

 Insurance industries are undergoing profound changes  Insurance premiums are expected to exceed $40 billion within a few years  Growth of about 15% per annum is expected for conventional insurance and 20% for Takaful  Establishment of a Forum for insurance regulators to enhance cooperation, and achieve harmonization among the different regulatory systems Development in the MENA Region

 Designed a strategy to regulate and develop the insurance sector to enhance the professional development of insurance institutions  A regulatory system that drive business forward  Transparent and predictable environment that allows full foreign ownership of insurance businesses  Regional role in the provision of insurance services Development in Jordan

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