Document Type : Original Research Paper
Authors
1 Assistant Professor, Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran.
2 Assistant Professor, General Insurance Research Group, Insurance Research Center, Tehran, Iran.
3 Head of Financial Management of Iran Moein Reinsurance Company, Tehran, Iran.
4 PhD Candidate, Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran.
Abstract
BACKGROUND AND OBJECTIVES: The purpose of drafting regulations and disclosure requirements, both for supervisory bodies and for the public, is to reduce information asymmetry, enhance transparency, and improve comparability to boost market efficiency and regulation. The International Association of Insurance Supervisors (IAIS) is the global standard-setting body for the insurance industry, comprising supervisory and regulatory authorities from over 200 jurisdictions across 140 countries, representing approximately 97% of the world’s insurance premiums. One of its main objectives is to develop and promote supervisory standards and guidelines for the insurance sector, covering various aspects such as solvency assessment, risk management, and corporate governance. In addition, the European Union Directive EC/138/2009, known as Solvency II, provides a comprehensive regulatory framework for insurance companies operating within EU member states.
The insurance regulatory body in each country enacts laws and regulations regarding information disclosure to protect the rights of stakeholders. Given the necessity of determining the level of reporting and disclosure regulations for insurance companies, the present study aims to develop reporting and disclosure components in Iran. The “Regulation No. 88 on Reporting and Disclosure of Insurance Institutions,” enacted by the High Council of Insurance, currently serves as the legal basis for mandatory information disclosure by all insurance companies in Iran. Under this regulation, insurance companies are obliged to report information regarding their business plan, corporate governance, risk management, and solvency position, as well as their financial status and performance, to the regulatory authority — the Central Insurance of the Islamic Republic of Iran. In addition, they must publicly disclose this information on their official websites.
METHODS: This applied research was conducted in three stages. In the first stage, the challenges of Regulation No. 88, ratified by the High Council of Insurance and titled “Reporting and Disclosure of Information by Insurance Institutions”, were identified through interviews and content analysis. The snowball sampling method was employed, and data collection continued until theoretical saturation was reached. In the second stage, by reviewing reporting and disclosure regulations in Iran’s insurance industry, international regulatory frameworks, the European Union, and selected countries, relevant reporting and disclosure components were extracted through document and content analysis. Finally, in the third stage, the proposed components were refined and validated using expert opinions gathered via a questionnaire, applying the Fuzzy Delphi method to reach a consensus. To quantify the responses, a five-point Likert scale with fuzzy triangular numbers was applied. Based on the structure and logic of the questionnaire, two types of five-point Likert scales with different verbal anchors were used: one ranging from “strongly agree” to “strongly disagree,” and the other from “very important” to “not important at all.”
FINDINGS: The results are analyzed in three sections: "Fundamental Concepts," "Key Principles in Determining Reporting and Disclosure Requirements," and "Review and Evaluation Process by the Supervisory Authority." The findings in the first section indicate that reported information should have qualitative characteristics and be understandable to users. In the second section, the results show that a precise framework should be developed and implemented. Additionally, a supervisory plan should be designed to determine the frequency and scope of monitoring the reporting process. In the third section, the findings emphasize the corporate governance framework and the importance of analyzing board meeting minutes, auditors' reports, and ownership structure evaluations. Furthermore, risk management reporting should include a risk appetite statement, a risk management strategy, and a business plan addressing significant risks over three years, along with the internal capital adequacy assessment process. For public disclosure, the study identified key indicators such as company specifications, corporate governance framework, technical reserves, financial instruments, and other investments, underwriting, investment, and liquidity risks, asset-liability management, capital adequacy (solvency), financial performance, and corporate sustainability.
CONCLUSION: This study provides a descriptive overview of the current regulations on reporting and disclosure in the insurance industry in Iran and globally. It also offers guidance for developing a reporting and disclosure model tailored to the Iranian insurance industry.
To improve supervisory processes and enhance transparency and the quality of information for reporting and disclosure purposes, it is recommended that a comprehensive database for public reporting and disclosure be designed. Information should be categorized into tiers, and a precise reporting and disclosure timeline should be announced accordingly. Additionally, the components of reporting and public disclosure should be revised, and a practical guideline for the regulatory framework should be developed. This guideline should clearly define the elements of reporting and disclosure to promote greater transparency and improve comparability across insurance institutions.
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