• Sunday 01st February 2026
• 18

Insurance Skills Course

How did insurance come about?

Certainly, the first human achievements in the insurance industry were achieved by sailors and maritime merchants. One of the first forms of the emergence of insurance can be attributed to Chinese merchants. They had realized that the probability of sinking or being robbed of all the boats and ships that pass through a port on a single day was very small. Therefore, to avoid the risk of destroying all capital, they loaded their cargo and goods onto several different ships and boats.

Phoenician and Babylonian merchants had learned a more advanced form of insurance; they received loans to cover the cost of goods and ships. The interest on the loans received by these merchants was higher than usual, and if the merchant ship was hit by a storm or robbed by pirates at sea, the merchant's loan was forgiven, in other words, the lender assumed the risk of unforeseen events for the ship. The difference in interest paid on loans for sea voyages and ordinary loans at that time can be considered one of the earliest forms of insurance premiums in ancient civilizations.

This mechanism later went to Greece and in the Middle Ages to Italy and became a common method of maritime transactions in various Italian ports such as Venice, Lombardy and Genoa. The oldest written record of marine insurance contracts is also related to an Italian ship registered in Genoa in 1347.

The emergence of insurance in its modern form

At the beginning of the 17th century, English merchants and shipowners established a contract that can be considered the first form of modern insurance. They met in a cafe in London called Lloyd's and made a contract with each other to share the profits and losses of sea voyages. In fact, they founded Lloyd's Insurance Company, which is still known as one of the largest companies active in the insurance industry today.

In 1666, after the Great Fire of London, London officials and financiers gathered at Lloyd's Cafe to find out the root cause of such an event and prevent it from happening again in the future. One of the ways they agreed on was to divide the heavy losses among a large number of people. Thus, fire insurance was born, after marine insurance, as the second major branch of insurance in the modern world.

What was the first insurance industry?

The first insurance industry to enter the United States was fire insurance. Small towns in the country had wooden houses and there were not enough firefighting equipment in these cities. The first insurance company in America was a cooperative society that was founded in 1735 in Charleston, South Florida. However, this company went bankrupt six years later, in 1741, due to the Great Charleston Fire. In 1752, another insurance company named P.C.I.H.L.F. was founded by Benjamin Franklin, based on European insurance companies. This company also ceased its activities in 1770 due to the activities of competing companies that started operating in America after that.

Insurance in Iran

The history of insurance activity in the country is informal for more than a century. For the first time in 1289 AH, two foreign insurance companies established a representative office in Iran. The first law passed in Iran regarding insurance companies was the Company Registration Law of December 2, 1931, which in Article 8 made insurance companies, both Iranian and foreign, subject to a regulation issued by the Ministry of Justice.

The establishment of the Iran Insurance Joint Stock Company on November 15, 1935 and the approval of the Insurance Law on May 7, 1937 should be considered the starting point of developments in the country's insurance market. With the approval of this law, about 10 foreign insurance companies registered their branches and representative offices in Iran. In 1930, the first private Iranian insurance company, called "Eastern Insurance", was established.

Establishment of Central Insurance

The simultaneous supervision and insurance of the Iran Insurance Joint Stock Company in the insurance market caused policymakers to seek to separate the management from policymaking and supervision in the insurance market, and with the establishment of Central Insurance, the developments in the insurance industry gained further momentum.

The Law on the Establishment of the Central Insurance of Iran and Insurance was approved on 20 Khordad 1350 in 77 articles and outlined the activities and operations of insurance companies for domestic and foreign companies. Article (1) of this law states that:

In order to regulate, generalize and direct the insurance business in Iran and to protect policyholders, insureds and their rights holders, as well as to supervise this activity, an institution called the Central Insurance shall be established in accordance with the provisions of this law with the following objectives:

Regulating the country's insurance market and directing it through the approval of regulations and rules

Developing and generalizing commercial insurance

Granting licenses to establish companies and brokerage networks and supervising the activities of insurance companies on behalf of the government in the market

Performing compulsory reinsurance affairs for insurance companies

Accepting and assigning reinsurance with domestic and foreign institutions

Regarding the insured:

The insured must provide the insurance company with all information that is effective in assessing the risk under insurance when concluding the insurance contract, as well as during its execution, whether the insurer has requested this information in the insurance policy proposal form or not. If the insured intentionally refrains from stating a matter that changes the subject of the risk or makes a false statement, even if the concealed or false statement has no effect on the occurrence of the accident, the insurance contract will be null and void from the date of conclusion. In this case, the insured's payments will not be returned to him.

Principle of Insurable Interest

According to this principle, a person is entitled to receive compensation if he is a beneficial owner of the property. In this way, no one can insure another person's property and receive compensation in the event of an accident. According to this principle, the insured person must be the person who, in the event of a loss, suffers financial loss from this event. In fact, this principle occurs when the insured benefits from the insured remaining healthy and the insured being exposed to risk causes loss and damage to the insured. Therefore, the insured must be a beneficiary in the survival of the insured subject and be interested in the insured risk not occurring.

It is worth noting that the insured interest is not limited to owners and the following persons also have insurable interest: ownership, limited ownership, mortgagee and mortgagee, lessor and tenant, legal liability, trustee and executor and guardian, creditor, employer and spouse.

The following must be stated in the insurance policy in a completely precise and clear manner:

Date of conclusion of the insurance contract

Name and characteristics of the insurer and the insured

Subject of insurance

Risk or danger that led to the conclusion of the insurance contract

Date of commencement and termination of the insurance policy

Amount of insurance premium and method of payment

Amount of the insurer's obligations in the event of an accident

Cases of cancellation of the insurance policy by the insured (customer)

In some cases, the insured person can cancel the insurance policy, which include the following:

If the risk of the insured subject decreases and the insurance company is not willing to reduce the insurance premium.

If the insurance company's activities are stopped for any reason.

If the insurance company requests cancellation of the insurance policy for other reasons, it is necessary to calculate the term insurance premium of the insurance policy and pay the remaining premium to the individual.

Cancellation of the insurance policy when transferring ownership

If the ownership of the insured subject is transferred through a transaction or inheritance, the insured can cancel the insurance policy and receive the remaining term insurance premium of his insurance policy from the insurance company. In the event that the insurance policy is not cancelled, if the new owner fulfills the insurer's obligations to the insurer, the insurer's obligations to the new owner will continue.

In the event that the subject of insurance is transferred to another person, until the insurer is notified of the transfer, the transferor will be responsible for paying all overdue premiums.

If the number of heirs or new owners of the subject of insurance is more than one person, each of them will be responsible for paying the entire premium to the insurer.

If the transfer of ownership of the subject of insurance occurs after an event that has not been notified to the insurer, the insurer will not be liable for any damages incurred to the new owner.

Types of Insurance

Types of insurance are very numerous and diverse, but they are divided into three general categories:

Personal

Property

Liability

And some types of special insurance have also recently emerged in Iran.

Personal insurance includes:

Life

Accident

Medical

Property insurance includes:

Car insurance (third party, body)

Fire

Engineering insurance

Goods transportation insurance (export, import, transit, domestic)

Liability insurance

Liability insurance has various types, some of which we mention here:

Employer's liability to employees

Professional liability of doctors and paramedics

Civil liability of managers and technical officials of hospitals - clinics and dispensaries

Liability to neighboring neighbors due to the spread of fire and explosion

Types of special insurance include:

Bank loan insurance

Money in the box insurance

Ostrich insurance

Horse insurance