CBJ rejects insurance premium hike, announces regulatory overhaul

AMMAN — The Central Bank of Jordan (CBJ) on Tuesday rejected a proposal from insurance companies to raise premiums for compulsory motor insurance.

The CBJ unveiled a comprehensive package of amendments to the regulations governing the sector, which will take effect on January 1, 2025, according to a CBJ statement.

The CBJ also said that these amendments aim to balance the financial sustainability of insurance companies, reduce the burden on citizens, and ensure fair compensation for accident victims.

"The decision follows an in-depth review of industry challenges, particularly the financial strain caused by maintaining fixed insurance premiums for 14 years despite significant increases in international vehicle repair and parts costs."

Among the key changes were enhanced claims and compensation procedures designed to improve fairness, transparency, and efficiency for claimants, the  CBJ said, noting that clear guidelines will be issued to help individuals navigate the claims process, detailing the steps required and how to submit claims, the CBJ said.

Under the new amendments, insurance companies must settle claims within five working days for amounts up to JD3,000 and within ten working days for amounts exceeding JD3,000 once the claim is approved.

Companies failing to adhere to these deadlines will face fines of up to JD10,000, with repeat offenders incurring doubled penalties.

Additionally, vehicles less than three years old can be repaired at authorised dealerships or approved repair centres that meet warranty standards, ensuring high-quality repairs and compliance with manufacturer specifications.

In terms of compulsory insurance premiums, rates would remain unchanged across all vehicle categories.

Drivers with no traffic offences during the policy year will continue to enjoy a 15 per cent discount on their premiums.

Consequently, the cost for private vehicles will decrease from JD78.75 to JD66.90, while public vehicle premiums will drop from JD166.25 to JD141.30.

Vehicles involved in traffic violations would be subject to a one-time surcharge of JD12. The surcharge will only apply to private and public vehicles, excluding rental vehicles, buses, trucks, agricultural vehicles, motorcycles, and other special vehicles.