Insurance laws Lebanon
Lebanon's insurance legal framework is characterized by a blend of established laws and an evolving regulatory environment, particularly in the face of recent economic challenges and political instability.
1. Primary Laws and Regulations:
Insurance Law (likely a foundational law, potentially amended over time): While specific dates aren't always universally cited for a single "Insurance Law," the core principles governing insurance contracts and operations derive from decrees and legislative acts.
Code of Commerce (COC): The Commercial Code plays a significant role in defining aspects of insurance contracts, including obligations of the insured to inform the insurer of contingencies (Art. 974 COC).
Code of Civil Procedure (CCP): This code governs dispute resolution, including the jurisdiction of courts for insurance-related matters (e.g., Art. 109, 110, 111 CCP for life, accident, and fire insurance disputes).
Ministerial Decisions and Decrees: The Minister of Economy and Trade, in coordination with the regulatory body, issues various decisions and decrees to further organize and regulate the sector.
Circulars, Instructions, and Guidelines: The Insurance Control Commission (ICC) issues detailed directives to insurance companies and intermediaries.
2. Key Regulatory Body:
Insurance Control Commission (ICC): Established in 1968, the ICC is the primary regulatory and supervisory authority for the insurance sector in Lebanon. It operates under the Ministry of Economy and Trade. Its key prerogatives include:
Licensing and Control: Granting and overseeing licenses for insurers, reinsurers, brokers, agents, and loss adjusters.
Financial Oversight: Ensuring the financial soundness and solvency of insurance companies, including setting requirements for capital, solvency margins, and technical reserves.
Market Conduct: Protecting the interests of policyholders and other stakeholders against unfair market practices.
Enforcement: Applying administrative and financial enforcement measures, including sanctions and disciplinary actions.
Reporting: Publishing quarterly and annual reports on the state of the insurance market.
Crisis Management: The ICC has played a crucial role in responding to major events like the Beirut Port explosion and adapting regulations to economic challenges (e.g., allowing higher percentages of real estate investments and reinsurance share in technical reserves to cover technical reserves).
3. Key Features of Lebanon's Insurance Laws:
Compulsory Insurance:
Motor Third-Party Liability Insurance: This is a major compulsory insurance, covering bodily injury and material damage caused to third parties by motor vehicles.
Health Insurance for Foreign Residents: Foreigners residing in Lebanon (specifically those applying for an annual residency permit, 5th class) are required to have health insurance.
Other types of compulsory insurance for specific activities (e.g., aviation liability, marine liability, professional indemnity for certain professions) may also exist or be under consideration.
Foreign Direct Investment: The Lebanese insurance industry generally allows foreign direct investment.
Minimum Capital Requirements: Specific minimum capital requirements are set for insurance companies.
Solvency and Reserve Requirements: Insurers are subject to solvency standards and must maintain adequate reserves (technical, premium) as per ICC regulations.
Non-Admitted Insurance: Generally, non-admitted primary insurance for risks located in Lebanon is not permitted, but non-admitted reinsurance is typically allowed.
Dispute Resolution:
Insurance policies often refer to the jurisdiction of local Lebanese Courts.
Lebanon also has an Insurance Arbitration Council (IAC), which is a specialized court for insurance disputes, composed of judges and experienced insurance professionals.
While not mandatory, parties may voluntarily choose Alternative Dispute Resolution (ADR) methods like negotiation, mediation, or arbitration. Arbitration clauses in insurance contracts are permitted.
Claims Handling: The law requires the insured to inform the insurer of any contingency likely to involve the insurer's liability within three days of becoming aware of it (Art. 974 COC). Insurers are also subject to requirements regarding appointing experts or loss adjusters to assess claims.
Challenges and Reforms: The Lebanese insurance sector has faced significant challenges due to the country's economic crisis, currency devaluation, and political instability. The ICC and the Ministry of Economy and Trade are actively working on reforms, including:
Strengthening financial controls and moving towards risk-based capital adequacy requirements.
Ensuring the implementation of international accounting standards like IFRS17.
Addressing the impact of the Beirut Port explosion and related claims.
Enhancing consumer trust, which has been eroded by the economic situation.
There's an ongoing effort to introduce a new insurance law that aims to grant the ICC more independence and authority.
4. Industry Associations:
Association of Insurance Companies in Lebanon (ACAL): This association represents licensed insurance companies and plays a role in promoting the industry, cooperating with regulators, and safeguarding public interest.
For the most up-to-date and specific details, especially given the dynamic situation in Lebanon, it is advisable to consult the official website of the Insurance Control Commission (ICC) and seek advice from legal professionals specializing in Lebanese insurance law.
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