Details of the increase in teacher insurance capital to 750 billion tomans

According to the Monetary News Reporter, based on the justification report published by Moallem Insurance Company in the Cadal system regarding the capital increase of this company, the company intends to implement the provisions of Note 2 of Article 161 of the Amendment to the Commercial Code and Article 26 of the Company Articles of Association. Moallem Insurance Company (Public Joint Stock Company) from the amount of 4,194,722 million Rials to the amount of 750,000 million Rials in order to reform the financial structure, increase the share of holding and obtaining a rejection acceptance license, increase financial wealth and increase investment capacity in two stages Accumulated profits, receivables and cash contributions of shareholders are presented.

Due to the emphasis and obligation of Central Insurance on increasing the capital of Moallem Insurance Company in order to maintain wealth at an appropriate level and increase risk acceptance capacity, this capital increase is required to prevent the limitation of insurance operations by Central Insurance.

Teacher Insurance stated in this report that since the increase in capital resulting from the revaluation of assets is not included in the calculations of some central insurance indicators, the previous increase in teacher insurance capital helps to increase financial wealth, reform the financial structure and increase the share and obtain this reliance license. Did not participate.

Financial structure reform

The company has stated that the requested capital increase will lead to improved financial indicators, including debt-to-assets ratio and ownership ratio. On the other hand, by improving the capital structure, the information needed to make big decisions in the teacher insurance company will be provided and as a result, its competitiveness will increase.

Increase maintenance share

According to Central Insurance Regulations 55 and 55.1, the authorized risk capacity of each insurance company has a direct relationship with its capital. If the capital is increased, the maintenance capacity will be increased and teacher insurance will be able to access and participate in larger markets, which will ultimately increase the company’s revenue and profits.

Increase financial wealth

According to Regulation 69 of the Supreme Insurance Council, the financial affluence ratio indicates the financial ability of the insurance company to cover its accepted risks and is obtained by dividing the amount of existing capital by the amount of required capital. Insurance companies are divided into 5 levels based on this index:

Level one: financial wealth above 100

Level two: Financial wealth between 70 and 100

Level three: Financial wealth between 50 and 70

Level four: Financial wealth 10 to 50

Level five: Financial wealth less than 10

For companies with a wealth level of 2 to 5, Central Insurance imposes restrictions such as reduced activity in selling insurance policies, restrictions on doing business, making financial repairs, and so on.

The teacher insurance justification report shows that the company needs to increase capital in proportion to the increase in market share in order to further improve financial wealth, expand insurance operations and increase the level of risk-taking, and finally, the possibility of fulfilling obligations is always possible. .

This report shows that the company intends to increase its 1,615,278 million rials (equivalent to the current 38.5% of the current capital) from the accumulated profit in the first phase.

In the next stage, Moallem Insurance will increase its capital by 1,690,000 million Rials (equivalent to 29% after the first stage) from the current claims and the cash flow of shareholders after the registration of the first stage.

The members of the board of directors of Moallem Insurance have emphasized that if the capital is increased, the company will move towards concluding insurance contracts with higher and less risky and profitable investments by participating in tenders more prominently. This capital increase is expected to increase the growth of premiums issued in the coming years. On the other hand, increasing the size of the insurance portfolio with less potential risks will also affect the loss ratio in the coming years.