A Chapter From - Regional Practical Guide - Insurance - Iraq
Transport & Insurance Focus
Iraq’s insurance sector is regulated through a centralized framework administered by the Insurance Bureau, which oversees all insurance, reinsurance, and intermediary activities, including Islamic (Takaful) insurance.
Law Update: Issue 376 – Transport & Insurance
Anand SinghSenior Counsel, Transport & Insurance
Melody HuangAssociate,Transport & Insurance, China Group
Nazly SadikParalegal,Transport & Insurance
This article forms part of a regional regulatory guide for the insurance sector and sets out sample questions and responses specific to Iraq. It offers a comprehensive overview of the regulatory environment under the supervision of the Insurance Bureau (also known as the Iraqi Insurance Diwan), which operates under the Ministry of Finance and is the sole authority responsible for regulating insurance and reinsurance activities in the country. The guide outlines key regulatory requirements across areas such as licensing, reinsurance restrictions, intermediary oversight, outsourcing, capital thresholds, and dispute resolution mechanisms. The aim is to provide insurers, reinsurers, and intermediaries with a practical reference for operating within Iraq’s evolving insurance sector.
What is the name of the main regulator(s) governing insurance in this jurisdiction?
Main Regulator: The primary regulatory body for the insurance sector in Iraq is the Insurance Bureau also known as Iraqi Insurance Diwan, which operates under the Ministry of Finance.
Islamic Insurance Regulator: The Insurance Bureau also regulates Islamic insurance (Takaful) under its broader mandate of overseeing insurance activities in Iraq. Islamic insurance operations would fall under the general insurance regulation framework but may have specialized guidelines based on Islamic finance principles.
Reinsurance Regulator: The Insurance Bureau also oversees reinsurance activities as part of its jurisdiction, regulating both domestic and foreign reinsurers operating within Iraq.
What are the main areas which they regulate?The Insurance Bureau regulates the following areas:
The licensing and regulation of insurance companies (both public and private, as well as foreign insurers operating in Iraq).
Oversight of insurance brokers, agents, and experts (including qualifications and licensing).
Setting and monitoring solvency margins and technical reserves.
Implementing policies for anti-money laundering within the insurance sector.
Monitoring financial stability and solvency of insurers.
Overseeing insurance practices, ensuring compliance with industry standards, and safeguarding the rights of policyholders and beneficiaries.
Issuing regulations and instructions regarding the operations of insurers, including policies, capital requirements, and reserve requirements.
Does Iraq have any other independent jurisdiction that function separate from the onshore jurisdiction? In Iraq, while there are multiple free economic zones that offer businesses various incentives like tax exemptions and relaxed regulatory requirements in certain areas, the Insurance Bureau (Al-Diwan al-Tamin) remains the central authority regulating insurance activities, even within these zones. Insurance companies, including both local and foreign entities, must still adhere to the requirements set by the Insurance Bureau, including licensing, solvency, and reporting obligations. While free zones may provide specific operational advantages, they do not exempt insurance companies from complying with the national insurance regulatory framework.
Are there any restrictions on the way reinsurance operates in this jurisdiction?Reinsurance operations in Iraq are subject to specific regulatory requirements under the Regulation of Insurance Works Law (Order No. 10 of 2005). According to Article 27, insurers are permitted to reinsure both within and outside Iraq. However, they cannot reinsure insurance contracts for any type of insurance unless the reinsurer is licensed to practice that specific type within Iraq. This restriction ensures that only qualified and authorized reinsurers handle such transactions, thereby safeguarding the interests of policyholders and beneficiaries. Additionally, Article 12(3) empowers the Head of the Insurance Bureau to issue detailed standards for reinsurance, ensuring that the practice adheres to regulatory expectations and maintains market stability.
Are there limits or requirements for outsourcing operations to third-party vendors, particularly for critical functions?Order No. 10 of 2005 does not explicitly prohibit the outsourcing of operations to third-party vendors. However, it emphasizes the importance of maintaining regulatory compliance and safeguarding the interests of policyholders. Under Article 77(2), insurers can engage experts who are not registered with the Insurance Bureau for specific technical tasks, provided they obtain written approval from the Bureau. This requirement ensures that outsourced functions, particularly critical ones, meet the necessary professional standards. Additionally, Article 45 requires that all managers and key personnel involved in insurance operations possess appropriate qualifications and experience, indirectly ensuring that outsourced vendors meet similar standards. While the law permits outsourcing, it does so under the condition that it does not compromise regulatory oversight or consumer protection.
How are foreign branches regulated in Iraq?Article 46 of Order No. 10 of 2005 mandates that foreign insurers appoint a Managing Director for their branch before obtaining a license to conduct insurance activities in Iraq. The insurer must notify the Insurance Bureau of the Managing Director’s name, address, and qualifications within 30 days of the appointment. If the position becomes vacant, the insurer must appoint a replacement within the same timeframe. Furthermore, the foreign insurer must submit an official document authorizing the branch manager to issue policies, pay claims, and represent the insurer before authorities. Under Article 46(4), foreign branches are also required to publish their annual closing accounts for operations conducted in Iraq and provide the Bureau with a copy of the full financial statements of the parent company and all its branches worldwide.
What are capital requirements in Iraq? In Iraq, the capital requirements for insurance and reinsurance companies are governed by (Order No. 10 of 2005). Article 28 of the law mandates that insurers cannot engage in insurance activities unless they meet the minimum capital requirements specified by the Insurance Bureau. The exact capital amount varies based on the type of insurance business being conducted and is determined by the Bureau through regulations and instructions.
Is there a statute of limitations on insurance claims If so, what is it?Yes, Order No. 10 of 2005 establishes a statute of limitations for insurance claims. Article 69 states that once liquidation proceedings begin, claims against the insurer must be submitted within the timeframes outlined by the liquidator. Generally, creditors residing in Iraq have 60 days from the last publication date of the liquidation notice to submit their claims, while those outside Iraq have 90 days. Although the law does not specify a general limitation period for non-liquidation claims, the Iraqi Civil Code typically applies a three-year limitation period for contractual claims, including insurance disputes, unless otherwise stipulated in the policy.
What mechanism do insurance policies usually provide for resolution of coverage disputes?Insurance policies in Iraq typically provide for resolution of coverage disputes through arbitration or court proceedings, depending on the policy terms. Article 79 of Order No. 10 of 2005 encourages insurers to include mediation and arbitration clauses in their policies. If the policy does not specify an ADR mechanism, disputes are generally resolved through litigation in the civil courts. The Insurance Bureau plays a supervisory role in ensuring that disputes are handled fairly, and parties can escalate unresolved matters to the judiciary if necessary.
Iraq’s insurance sector is regulated through a centralized framework administered by the Insurance Bureau, which oversees all insurance, reinsurance, and intermediary activities, including Islamic (Takaful) insurance. While the regulatory environment is still developing, it incorporates clear licensing rules, capital requirements, oversight mechanisms for reinsurance, and guidance on foreign branch operations. The regime also provides for flexibility in dispute resolution and outsourcing—subject to regulatory safeguards that protect policyholders and market integrity.
Our insurance lawyers in Iraq are experienced in advising both local and international clients on regulatory compliance, licensing, reinsurance structuring, intermediary arrangements, and dispute resolution. Whether you are looking to enter the Iraqi market, manage your regulatory obligations, or expand operations, our team is well-equipped to support your legal and strategic needs. Please feel free to reach out to us for expert advice on any insurance-related matters in Iraq.
For further information,please contact Anand Singh, Melody Huang and Nazly Sadik.
Published in April 2025
