In June 2021, the Central Bank of Jordan did not simply assume responsibility for a new supervisory portfolio. It inherited a sector weighed down by structural weaknesses, regulatory fatigue, and declining public confidence. At that time, the Jordanian insurance market was widely perceived as fragile, fragmented, and unable to meet modern standards of governance and financial resilience. Less than four years later, the sector presents a strikingly different picture, reflecting a comprehensive transformation grounded in transparency, sound regulation, and institutional discipline.

 

This shift was not a routine administrative reform. It represented a fundamental redefinition of the insurance ecosystem, transforming insurance companies from perceived adversaries of policyholders into proactive partners in protection and risk management. The reform story is one of strategic intervention led by a prudent regulator and reinforced by an ambitious legislative framework designed to position Jordan’s insurance sector as a credible regional benchmark.

 

The foundation of this transformation was laid by the Insurance Business Regulation Law No. 12 of 2021, which transferred full supervisory authority to the CBJ. This legal change redirected regulatory objectives from procedural oversight toward safeguarding financial stability and strengthening corporate governance. Legislators recognized that the sector’s previous crises were rooted primarily in governance failures. Accordingly, the law introduced key principles such as separating ownership from management, defining controlling shareholders, and regulating effective interest to prevent conflicts that had long drained policyholders’ funds.

 

Alongside governance reform, the CBJ prioritized improving insurers’ financial strength. Minimum capital requirements were revised, and solvency regulations were updated to align with international standards and best practices. The objective was to build financially sound companies capable of absorbing shocks, honoring obligations, and contributing meaningfully to the national economy.

 

Legislative reform continued to advance. In 2024, the Policyholders and Beneficiaries Protection Fund Regulation No. 53 of 2024 was issued, establishing a final safety net to protect rights if an insurance company becomes insolvent. The same year witnessed the introduction of new compulsory motor insurance regulations and amendments to the Jordan Insurance Federation’s framework, reinforcing its role in self-regulation and internal sector oversight. Collectively, these measures transformed the legislative environment into an integrated system safeguarding all parties in the insurance process.

 

For decades, insurance companies were stereotyped as bureaucratic entities that delayed claims and erected barriers before clients. Under new supervisory instructions, including the Code of Professional Conduct, this image has been fundamentally reversed. The injured party is no longer required to pursue the insurer. Instead, companies must initiate contact immediately after an incident is reported, signaling a cultural shift from avoidance toward accountability and responsibility.

 

Upon assuming oversight, the CBJ faced a critical challenge: how to address distressed insurers without triggering shocks that could undermine confidence or harm policyholders. The response was measured and strategic, reflecting a deep understanding of systemic financial stability.

 

Between 2021 and 2025, the number of insurance companies operating in Jordan declined from twenty-three to nineteen. This reduction reflected rigorous regulatory scrutiny rather than market contraction. Weak companies were granted limited time to correct their positions under strict conditions, including bans on new business and the appointment of temporary administrative committees under direct supervision. Where corrective efforts failed, compulsory liquidation was applied as a last resort to protect public funds, consistent with international supervisory standards.

 

Despite challenges, performance indicators improved significantly. In 2025, total gross written premiums reached 856 million dinars, representing growth of thirty four percent compared with 2021. Sector assets exceeded one billion dinars. More importantly, technical performance improved, with after tax profits rising from 11.8 million dinars in 2021 to 18 million dinars in 2024.

 

These gains were enabled by regulatory clarity and transparency, which strengthened investor confidence. The law permits up to one hundred percent foreign ownership, while the focus on specialized products, particularly medical insurance, which represents over one third of the market, supports sustainable growth.

 

To further regulate insurer client relations, preparations are underway for a new Insurance Contract Law. It is expected to enhance consumer protection, limit unfair terms, mandate clear language, regulate compensation delays, affirm cancellation rights, and criminalize fraudulent claims.

 

Jordan’s insurance sector has exited the emergency phase and entered a stage of maturity and real competition. Through sound governance and enlightened supervision, the CBJ has not only stabilized the sector but positioned it to attract investment and serve the national economy. Today, an insurance policy represents a genuine guarantee, supported by vigilant oversight and an informed consumer.