Analysis of Regulatory Approaches in Iranian Trade Insurance and Presentation of a Suitable Model

During last several years, we have observed a new effort from Iranian government in execution of Article N. 44 of Islamic Republic of Iran’s Constitution. Therefore, numerous private insurance companies have been founded thereafter and hence there should be a new reform-wise approach to regulation of the industry. Elimnation of tariff-based pricing system and a deep need to a financial-based alternative system can not be undertaken without a change in regulation.
Sudden disposal of tarof-based pricing system in most of insurance products in recnt years and led to a number of problems in insurance industry. Most important of who are: an anarchy situation in completion envoirnment among insurance companies, a limited form of monopoly in some parts of the industry and hence unhealthy competition among players, etc. All these consequences hasve raised a concern for responsible institutions in controlling and adjusting insurance market, which justifies a change of attitude in regulation. This change of approach should be with emphasis on financial affordability of insurance companies and the importance of undertaking their commitments and the way that they handle the claims.
This article tries to introduce different approaches of commercial insurance policies’ regulation, analyize them, and finally propose the best approach for Iran’s market.