The
Nationalization of Iraq's Insurance Sector - 1964
A Summary
Misbah Kamal
- The history of insurance in Iraq was marked by the
operation of two British insurance companies (1920) and the publication of the
first Iraqi law regulating insurance activity (1936).
- The nationalization laws were issued in July 1964*. At the time, there were 9 Iraqi insurance
companies (public and private) and 15 branches/agencies of Arab and foreign insurance companies.
- The brain behind the nationalization was Dr Khair Ed-Din
Haseeb who headed the Economic Enterprise that supervised the implementation of
the nationalization laws. He resigned
his post in 1965.
-
The nationalization was a copy of what was applied in
Egypt. Dr Haseeb acquainted himself with
the Egyptian experience in 1961 when he was the governor of the Central Bank of
Iraq.
- Nationalization was carried out without confiscation. Owners/shareholders of the nationalized
companies were compensated by turning shares into bonds earning interest for
shareholders. The nationalization act
was consistent with the UN General Assembly Resolution No 1803 of 1962 on fair
compensation for owners of the nationalized companies.
-
The Insurance provisions of the three laws governing nationalization,
issued in 1964-1965, are discussed in the paper.
- The nationalization of the insurance sector lasted
from 1964 to 1997 when a new company law was issued. The first privately owned insurance company was
established in 2000.
The full paper
outlines the economic and ideological motives for nationalization. It questions the thinking behind the act of
nationalization, examines the extent to which nationalization was a “socialist”
measure and assesses the outcome of nationalization. General issues like the role of insurance in
reducing dependency on oil rent and re-formation of the class structure were
raised for brief comments.
It is the author’s
belief that the overall outcome of nationalizing the insurance sector was
mixed. There was progress in certain
areas but equally there were constraints on development. To say that nationalization was inevitable is
questionable as there were other options besides nationalization in developing
the country’s insurance sector, such as defining a role for the state in
economic activity side by side with a role for the private sector.
______________________________________
*During Abdul
Salam Aref presidency.
The above is a
summary of a paper written in Arabic and published in 2008. It is available in
the following links:
A PDF version can
be obtained by contacting the author.
The
English summary was written by Misbah Kamal and edited by Wefa M. S.
The
Arabic summary was prepared by Wefa M.S. and edited by Misbah Kamal
Misbah Kamal learnt the principles of insurance in Baghdad when he started working for the National Insurance Company (1968). He holds first and postgraduate degrees from British universities (1967- 1978). Misbah worked for a London-based international insurance broking house and retired in 2016.