Jordan: Strengthening Actuarial Supervision
The Jordanian Insurance Commission (JIC) approached FIRST directly to fund technical assistance for strengthening actuarial supervision in June 2003. The project emerged from the need for the insurance sector to develop life and pensions products with a parallel necessity for the JIC to build its regulatory and supervisory capacity for such activity.
FIRST employed the UK’s Government Actuaries Department (GAD) for this project. The project was comprehensive in so far as it involved:
- An assessment of the life insurance market in Jordan
- The role of the actuary in supervision of both life and non-life insurance
- Review and recommendations related to existing legislation and regulation
- Assessed training needs
- Prepared manuals for supervision, guidance notes for the insurance companies, report formats and sample reports (over 30 in number)
Subsequently FIRST funded a follow on technical assistance project carried out by Lawrie Savage & Co which developed a supervisory ladder for risk-based supervision and made some revisions to the manuals prepared by GAD.
- Supervisory manuals need to take account of two circumstances:
- The situation as it is i.e. with no changes to legislation or regulation
- The situation as recommended if legislative and regulation amendments are adopted. In this project the manuals were drafted as if the recommendations were implemented. Although the JIC accepted most recommendations the adoption required external inputs from Parliament and other Ministries.
- Substantial training was needed and subsequent events led to many of the high quality staff leaving for various career reasons. This is a common problem in training of regulatory staff and is not easily remedied. Nonetheless more focus on sustainability is desirable. Possibly organizational changes may be feasible e.g. remuneration policies. Possibly it may be feasible to build an internal training capacity.
- The supervisory manual drafted by GAD (with some comments high-lighted by Lawrie Savage & Co subsequently). This manual provides a good and well sequenced series of issues for effective supervision and as such, whilst initially for the JIC, may have some value for other insurance regulators in emerging markets.