The Palestinian National Authority has been supervising the insurance sector in Palestine since 1993 and its geographical scope in this sector expanded in 1994. Bu virtue of the agreement of transfers of powers, the Palestinian National Authority has become the authorized body and supervisor of the insurance sector in Palestine, thus, granting licenses to insurers and insurance agents and supervising their activities.
Over a long period, the insurance sector has suffered from the absence of an appropriate Palestinian insurance law. This chaotic situation ended with the establishment of the Palestinian Capital Market Authority in 2004, thus becoming the authorized body to supervise, control and organize businesses related to the sector. Likewise, the issuance of the insurance law No. “20” for the year 2005 helped in reorganizing the insurance sector.
In cooperation with concerned parties, PCMA has developed detailed policies aimed at spreading awareness about insurance among members of the society and creating an enabling environment that is suitable for the development and growth of the insurance industry, thus benefiting the overall economic activity in Palestine. PCMA also seeks to raise and improve its performance in accordance with the best international standards and practices through the development of rules and regulations needed to improve the effectiveness of its supervisory role.
The Insurance Directorate has been able to set up the fundamental rules from which its tasks emanate as well as turning its ambitions into reality. To that end, several regulations and instructions were shaped in line with the development in the insurance industry in international markets. The directorate continues its work to regulate and supervise the insurance sector to ensure an environment that is suitable for its development and enhancement of its role in the national economy. This can be achieved through:
1- Setting detailed policies for the development and improvement of the insurance sector, in addition to preparing the regulations and instructions necessary to implement in cooperation with competent authorities.
2- Providing an appropriate working environment for the development and growth of the insurance sector.
3- Protecting the rights of clients and beneficiaries using insurance services.
4- Promoting insurance awareness programs.
5- Continuous development and improvement of the internal work system.
During the year 2017, and as stated in the PCMA strategic objectives, PCMA prepared a technical draft of “Management & Auditing Instructions in Insurance Companies”. The draft aims at applying good management practices in order to ensure that the company’s BOD is working in accordance with its powers and functions, which enables it to achieve independent supervision and control over the executive management of the company to protect the rights of stakeholder, shareholders and others in the company.
In accordance with the recommendations of the World Bank experts, PCMA has adopted, during the 2nd half of 2017, a risk-based supervision approach that is consistent with the international standards and best practices of the International Association of Insurance Supervisors (IAIS). A mechanism was established to implement market discipline controls, including sampling methodology and procedures related to the documentation of controls which are aimed at controlling the price levels issued by the Council of Ministers in the insurance market, as well as the compliance of insurance companies and professionals with professional codes of conduct.
By the end of 2017, 9 insurance companies were operating in Palestine. During the same year, the insurance sector experienced a growth by 18.7% from the previous year. Furthermore, the insurance portfolio reached about 225.4 million dollars while the total investment in insurance accounted for 2% from GDP at constant prices.