The Central Bank of Jordan has announced a series of significant amendments to the regulations governing mandatory vehicle insurance. These changes aim to strike a balance between protecting citizens' rights and ensuring the sustainability of the insurance sector. This initiative follows an in-depth study of the financial challenges faced by the sector, particularly the impact of fixed insurance premiums over 14 years despite the continuous global rise in repair and spare parts costs.

Accelerating Compensation Processes and Ensuring Financial Fairness

The amendments focus on expediting claim settlements and simplifying procedures to ensure that affected individuals receive their financial rights promptly and fairly. Key provisions include:

Defined Timelines for Claim Settlement:Compensation for claims up to JOD 3,000 must be paid within five working days from the claim's approval.

Compensation exceeding JOD 3,000 must be paid within ten working days.

Strict Penalties for Non-Compliance: Insurance companies failing to meet these deadlines will face fines of up to JOD 10,000, with penalties doubling in cases of repeated violations.

Authorized Repair Centers: Allowing vehicles less than three years old to be repaired at authorized agencies or approved repair centers.

Incentives for Compliant Drivers and Fixed Premiums

To encourage adherence to traffic rules and enhance public safety, the Central Bank introduced the following measures:

Maintaining Current Premiums:

Premium rates for all vehicle categories remain unchanged.

Discounts for Law-Abiding Drivers:

A 15% discount on mandatory insurance premiums for drivers with no traffic violations during the insurance year.

After the discount, premiums will be reduced to JOD 66.9 for private vehicles (down from JOD 78.75) and JOD 141.3 for public vehicles (down from JOD 166.25).

Additional Fees for Violations:

A one-time fee of JOD 12 will be applied for traffic violations on small private and public vehicles, excluding rental vehicles, buses, and other specialized vehicles.

Enhancing Transparency and Service Quality

The new amendments aim to elevate transparency and fairness in dealing with insurance policyholders, thereby increasing public trust in insurance companies. These changes also enable companies to provide high-quality services that align with global standards while supporting digital transformation to keep pace with developments in the automotive market.

A Step Towards Sustainable Insurance Sector

These amendments mark a qualitative shift in Jordan's insurance sector, balancing the rights of affected individuals with encouraging compliance with traffic rules. They also ensure the sector's sustainability by improving the efficiency of insurance companies and enhancing their ability to address financial challenges. This initiative is expected to position Jordan's insurance sector among global leaders in innovation and quality.

Implementation and Future Outlook

The new regulations are set to take effect on January 1, 2025, providing sufficient time for insurance companies and citizens to adapt. This initiative is anticipated to positively impact the economy and society by improving road safety, ensuring the rights of affected individuals, and supporting insurance companies in delivering advanced and sustainable services.