- The draft insurance law was presented to the Council of Ministers for the first reading, and several comments were received from ministries, government institutions, the Palestinian Federation of Insurance Companies, and the Palestinian Road Accident Victims Compensation Fund. Some of these comments were adopted, and the reasons for not adopting others were clarified. Follow-up with the Council of Ministers will continue to complete the process of issuing and passing the law according to the applicable procedures.
- The initiation of a survey study on the insurance sector in Palestine, focusing on market analysis and the potential environment, in collaboration with the Palestine Economic Policy Research Institute (MAS).
- Completion of the actuarial study for pricing vehicle insurance based on risks. The study included determining the base price for compulsory insurance, third-party insurance, and supplementary/comprehensive insurance, as well as identifying the risk factors that affect the insurance price. The study also took into account the profit margin, distributed expenses, and any other privileges that grant discounts to the insured. The pricing formula was programmed into a calculator and made available on the PCMA’s website for public use and feedback from citizens on the project.
- Completion of the development and approval of a risk-based supervision methodology and its implementation. The methodology adopted the Insurance Core Principles (ICPs) issued by the International Association of Insurance Supervisors (IAIS) as a foundation. These principles were modified to align with the laws and regulations issued by the Palestine Capital Market Authority and to suit the nature of the Palestinian insurance sector.
- Preparation of a risk assessment guide for the crimes of money laundering and terrorist financing in the insurance sector based on a risk-based approach.
- Completion of cooperation memorandums with the Palestinian Ministry of Labor regarding the application of the provisions of the Insurance Law concerning notifying the Ministry and the insured entity. This includes the possibility of electronic linkage between insurance companies and the Ministry in relation to workmen’s compensation insurance, work injuries, and exceptions to the unified workers’ insurance policy issued under Insurance Law No. (20) of 2005. It also emphasizes the commitment of insurance companies not to refuse to provide coverage for cases covered by law.
- Throughout 2023, the Insurance Companies Control Department continued to review financial statements and actuarial reports, update risk records, and issue solvency certificates to insurance companies. Reviewing quarterly, semi-annual, and annual financial statements of insurance companies helps achieve several objectives in the work environment, including granting the PCMA’s no-objection to publishing these statements and conducting financial and technical analysis of insurance companies. This ensures the companies’ ability to meet their obligations by reviewing the solvency margin (capital adequacy) and issuing solvency certificates. Additionally, the periodic statistical database for the insurance sector was issued, and the risk-based supervision methodology was developed. This year saw a significant shift in how financial data is presented by applying IFRS 17, the international standard for financial reporting. This aims to unify the presentation of financial statements for insurance companies globally. Palestinian insurance companies applied this international standard to the end of year financial statements as of 31/12/2023, complying with the circulars and directives issued by the PCMA despite the severe conditions related to the unfortunate war’s aftermath in the Gaza Strip since October 7. This war caused a financial crisis, significant economic recession, and damage to various sectors, severely weakening purchasing power. The crisis of withheld Makasa clearance revenues and its negative impact persisted, with some insurance companies suffering partial or total destruction of buildings and properties for companies with branches in Gaza. They also faced monthly premium losses, potential future cash flow impacts due to possible bad debts, salary losses, and the potential loss of documents related to claims and issued insurance policies. Notably, Gaza’s production only constitutes 2% of the total insurance portfolio in Palestine.
- Part of the annual plan for field visits to the headquarters and branches of insurance companies was implemented, with 64 supervisory tours conducted in 2023. These tours focused on monitoring the compliance of insurance companies and insurance professionals with the provisions of the Insurance Law and the related secondary legislation.
- In terms of handling complaints received by the PCMA, the Complaints Department dealt with 87 complaints submitted to the Insurance Directorate in 2023. Of these, 73 were processed and closed, while 14 complaints remained incomplete due to missing documents and could not be considered.
- Regarding the renewal of licenses for insurance companies and other insurance professionals, all licensed insurance companies had their licenses renewed for 2023 by the PCMA. Additionally, licenses for insurance professionals registered with the Insurance Directorate were also renewed. Licenses for those who no longer met the licensing requirements were canceled.
Services Provided to the Sector: “Issuing, renewing, and canceling licenses for insurance companies, agents, and insurance professionals”:
In 2023, licenses were issued for 2 insurance companies[1], 4 individual insurance agents, 5 corporate insurance agents, 2 individual and corporate insurance brokers, 2 individual and corporate reinsurance brokers, 1 insurance services management, 1 actuarial insurance expert,
[1] The Board of Directors of the PCMA approved the issuance of a license to the first company in 2022, and the licensing procedures and issuance of the license were completed in 2023. Meanwhile, the Board of Directors approved the issuance of a license to the second company in 2023, and the licensing procedures and issuance of the license were also completed in 2023.
