Iran's Central Insurance authorises war risk cover for companies, capping liability at 50 percent of insured capital

Iran's Central Insurance regulator has issued a circular to insurance companies authorising them to provide war risk cover to legal entities and businesses. Mehr News Agency reported on Sunday, 2 August 2026 (11 Mordad 1405), that the circular followed a letter from Mahmoud Najafi-Arab, head of the Tehran Chamber of Commerce, to Parviz Khoshkalam Khosroshahi, head of Central Insurance. In that letter Najafi-Arab wrote that many insurers, citing the high level of risk, were selling war risk cover only to individuals and declining to underwrite companies and economic institutions.

Under the circular, sent to insurers including Bimeh Iran, Asia, Alborz, Dana, Parsian, Karafarin, Razi, Mellat, Day and Saman, companies may offer war risk cover to units whose capital is less than 2,000 billion rials. The insurer's liability for claims over the cover period is capped at 50 percent of the insured capital, and the premium rate is set at a minimum of 8.5 per thousand of the insured capital.

The deductible on each claim is 20 percent of the payable loss, and war related losses must be confirmed by the competent authorities. The cover extends only to direct and indirect physical damage and may be issued as an endorsement or as a new policy, with no right of cancellation for either party. Only units in non military use may obtain up to 50 percent of that maximum liability as facultative reinsurance cover.