The session was led by the Legal Desk of the IRC and featured distinguished participants, including Dr. Mohammad Saleh Chitgaran, Legal Affairs and Contracts Manager at Taavon Insurance Company; Dr. Seyed Javad Mirghasemi, university faculty member; Hossein Ahmadi, Deputy Director General of Legal Affairs at the Central Insurance of the Islamic Republic of Iran (CII); Afshin Siavashi, Legal and Contracts Manager at Dana Insurance Company; Amir Kohan, Auto Insurance Manager at Ma Insurance Company; and Farhad Moazzi, a senior attorney. The event was attended by over 550 professionals and stakeholders from the insurance industry, both in person and via virtual platforms.

According to the Public Relations and International Affairs Office (PRIAO) of the IRC, the session featured two divergent perspectives on the regulatory directive issued by the supervisory authority regarding vehicle depreciation loss compensation.

Arguments for Revising the Directive

The first viewpoint advocated for a revision of the directive, citing the following concerns:

• The insurance industry was required to compensate for vehicle depreciation losses amounting to 50 trillion Iranian Rials (IRR) within a one-month period, despite not having collected corresponding insurance premiums for its liability.

• The Third-Party Insurance Law, enacted in 2016, does not explicitly address vehicle depreciation, nor was it the intention of the legislature to include such provisions.

• Insurance companies must be managed with a commercial approach to maintain financial sustainability and fulfill their obligations to shareholders.

• The directive has led to a surge in legal disputes and litigation, increasing insurers’ liabilities, straining relationships between insurers and policyholders, and contributing to policyholder dissatisfaction.

• Adverse economic conditions have significantly escalated compensation costs while diminishing revenues generated from investments, thereby weakening insurers' financial resilience. If this trend persists, insurers may face significant challenges in meeting their obligations.

• Vehicle depreciation has never been incorporated into third-party insurance premium calculations. Furthermore, premium rates are set by the regulatory mandates without adequate consideration of the annual inflation.

Arguments in Favor of the Directive

Conversely, the second viewpoint supported the directive, presenting the following justifications:

• Existing legal frameworks mandate the full compensation of damages, extending beyond direct losses. Consequently, vehicle depreciation should be considered an insurable loss covered by insurers.

• The directive issued by the supervisory authority establishes a structured framework for processing depreciation claims, thereby curbing fraudulent claims and ultimately benefiting insurance companies.

• Prior to this directive, similar compensation claims were often settled through court rulings, leading to unregulated financial burdens on insurance companies. The directive has formalized and restricted this previously informal practice, representing a step forward despite some implementation challenges.

• Compensation for vehicle depreciation constitutes an intrinsic component of insurance coverage rather than an optional add-on. Furthermore, insurers’ liability is limited to the maximum coverage stipulated in the insurance policy, and they retain the authority to determine additional financial premiums.

Proposed Revisions to the Executive Directive

Several recommendations were proposed for revising the CII’s executive directive, including:

• Integrating vehicle depreciation loss coverage into comprehensive (auto body) insurance policies.

• Expanding the directive’s applicability to include non-passenger vehicles.