Insurance reform strategy
unveiled by Minister of Economy

Restoring capital adequacy, dealing with

legacies, and dealing with health cost inflation

The Ministry of Economy and Trade (MoET) has unveiled a comprehensive strategy to overhaul the insurance sector. The plan was presented by the Minister, Amer Bisat, at the Higher Institute of Insurance Science (ISSA) at Université St. Joseph.

The initiative aims to modernize the industry and restore confidence in what the ministry highlights as the country’s last functioning financial intermediation channel. With banks and public institutions facing severe disruptions, the insurance sector is positioned as a critical institutional shock absorber and a key partner for national economic recovery.

The three-pillar reform agenda is focused on solidifying market structure, strengthening regulatory oversight, and controlling healthcare costs.

Building a solid market structure
The first pillar targets the commercial infrastructure of the market, addressing both insurance companies and brokers. For insurance providers, the ministry plans to restore capital adequacy and introduce risk-based capital requirements. The agenda will also facilitate voluntary consolidation to build stronger institutions, introduce rules for premium floats, and encourage new product development. An advisory firm has already been engaged to support this effort, with completion expected by mid-2027.

For insurance brokers, the ministry is tackling excessive intermediation to increase transparency. The plan calls for raising capital to strengthen balance sheets and establishing clear professional standards through a new Code of Conduct. It also introduces regulations for commission practices and creates measures to protect client money while combatting unauthorized intermediation. A draft decree is currently under discussion with Lebanon Insurance Brokers Syndicate (LIBS), with the process scheduled for completion by the end of summer 2026.

Legacies and expanding oversight
The ministry is moving to resolve lingering historical challenges while expanding its regulatory reach. Legislative interventions are underway to address unresolved claims from the Port of Beirut explosion and the collapse of the pre-crisis life insurance market. Annual life insurance premiums have plummeted from a pre-crisis level of $550 million to $600 million dollars to less than five percent of that volume, leaving policyholders unable to recover their contracted funds.

New regulatory frameworks will also bring previously unmonitored actors into the official perimeter. The ministry is preparing laws and decrees to regulate Third Party Administrators (TPAs) to enhance claims and cash flow management. The new perimeter will cover mutual insurance associations, local reinsurers, vehicle assistance operators, and actuarial practices.

Modernizing the regulator and the Insurance Code
A central component of the strategy is empowering the Insurance Control Commission (ICC). The ministry has already reactivated the National Insurance Board, which had been dormant since 2017. Leadership has also been restored to the ICC with the appointment of Nadim Haddad as permanent head, alongside two observers. Moving forward, the ministry is working to activate the Insurance Arbitration Council to resolve policyholder disputes without costly court processes, and it is strengthening the Consumer Protection Department.

To sustain these changes, the ministry intends to replace the outdated 1968 Code des Assurances with a new Insurance Code. The modern framework will legally embed consumer rights, group supervision requirements, a fit-and-proper governance regime, and a resolution framework for failing insurers. Minister Bisat emphasized that the draft will undergo a transparent and consultative parliamentary process to ensure the law holds for a generation rather than just the next quarter.

Containing health cost inflation
The third pillar focuses on making healthcare affordable and in parallel securing the financial stability of insurers. Acknowledging that health inflation is a structural issue across the entire value chain, the ministry is collaborating with the Ministry of Public Health on three parallel interventions.

These measures will focus on pricing transparency, clinical governance, and a regulated infrastructure. While the ministry notes that some quick wins are possible, this remains a long-term plan designed for sustainable correction.