Thursday, July 29, 2010

Insurance in 1935: Law No. 64 of Dallaleen


by Misbah Kamal



A Note on Insurance Intermediation in the
Law of Dallaleen No. 64 of 1935


In September 2008 I published a short study in Arabic entitled: "Concerning Intermediation and Insurance Intermediation in Iraq" in the Iraq Insurance Review blog http://misbahkamal.blogspot.com/2008_09_01_archive.html

In introducing the study I pointed out that it is "a preliminary incomplete study, which needs to be developed." In making that statement, I was hoping that "colleagues in Iraq would contribute to aspects of the legal and economic role expected of insurance brokers in the structure of Iraq’s insurance market.” I also mentioned that “insurance intermediation, as a distinct profession is not known in Iraq’s business sector; there is no business culture associated with insurance intermediation but, in the broad sense, it is not lacking in Iraq and in this context we have to recall intermediation in buying and selling real estate.”
Recently I have come across a piece of legislation entitled Law of Dallaleen No. 64 of 1935, confirming the validity of the comments that I have quoted above regarding the concept and practice of intermediation and its public circulation but more importantly the presence of insurance intermediation apparently as a distinct activity.

This Law (قانون الدلالين) is called Kanoon Al-Dallaleen. The word Dallaleen is the plural form of Dallal, which is used to imply auctioneer, insurance broker, stockbroker, intermediary, middleman and estate agent. Literally, the Arabic word Dallal means one who guides (and any professional intermediary is expected to guide clients).

I have translated the Law to English in full, appended below, for the benefit of the non-Arabic reader and to use it for my commentary on selected aspects of the law in the context of insurance intermediation. From the perspective of insurance history in Iraq, it is an important piece of legislation.

Here, I am taking advantage of some of the provisions of this Law to re-state and refine the general idea of intermediation to which I referred in my earlier study in Arabic– namely, that insurance intermediation, albeit in a limited form, was known and was the subject of limited regulation in the 193os.

Because of the generic nature of the concept “Dallal” as applied in this law, I have opted for using the English transliteration of the Arabic word in its various forms.

Article 1 of this Law provides the following definitions:

"Delalah – al-Wassattah [mediation, intermediation, brokerage] for concluding contracts or facilitating civil or commercial transactions concerning movable and immovable property, bonds and [shipping/insurance?] policies[1] and banknotes of different types and other branches deriving from such transactions.

Dallal [intermediary, broker] – he who is engaged in intermediation as a profession.”


We note here that the word "Dallal" is explained by the word al-Wassattah "mediation, intermediation” which suggests that the two words are synonymous. We also note that Delalah, the activity of intermediation, according to article 2 of this law, is limited to natural persons, as the law makes no specific provisions for the registration of the Dallal as a corporate body.

Sub-Article 2- E requires that the Dallal is “Competent in reading and writing in Arabic or employs a person with such competence.” This is interesting as it points to promoting Arabic as a language of business. It also implies that the Dallal might be either illiterate or a foreigner who has no command of the Arabic language. Thus, to make up for the lack of language competency, the Dallal has to employ “a person with such competence.”

Article 3 mandates that the Dallal must register at the Chamber of Commerce in the region where he practices his business. The registration is annual and subject to renewal and updating the identity of the category(ies) of Delalah engaged in. Here we see the early role of law in consolidating the position of chambers of commerce as partners in regulatory activity.

Article 4 refers to the classification of Dallaleen by the Chamber of Commerce to five categories but these categories are not mentioned (we assume that there was an implementing instrument or regulation in this regard that we have not been able to trace). We also assume that Delalah [intermediation, brokerage] in insurance business was one of these five categories. We are encouraged to assert this view because Schedule B of Order Number 14 of 1936, based on Law of Dallaleen No. 64 of 1935, sets the level of fees for intermediation in Baghdad in respect of a plethora of activities. The following fees were set for insurance:

“Fire and Flood and other Insurance, excluding life insurance, 10% of the original premium.

Life insurance, 25% of the total premium of the first year.”

The law also includes a few provisions on the organization of the Dellal’s business like bookkeeping, adherence to the designated category of activity for which he is licensed, i.e. not breaching the field of specialisation, etc (Article 6). Also, to be noted is the emphasis on trust and the penalties stipulated if it is breached (Article 8). This is a significant provision as it registers a basic regulatory principle underlying modern systems of protection for the insured’s interest.

We can conclude from reviewing these selected provisions that Delalah/intermediation activity, including insurance intermediation, was known in Iraq in the 1930s if not earlier but was not properly regulated and thus required legislative intervention in the form of the 1935 law and the orders derived from it.

We are not able to determine the source of this law. It may well be the case that it was based on an English model. But this is only a guess and needs proper investigation.

It is useful to note that this law, under Article 15, repealed the Ottoman Dallaleen and Brokers Order dated 26-7-1304 [20 April 1889] and its Supplement dated 25-8-1306 [26 April 1889]. The word Brokers here is a literal translation of the word Simsareen.[2] Unfortunately, we were not able to trace this Order and its Supplement, dating back to the nineteenth century, to compare it with the 1935 law. We are not sure if insurance and insurance brokerage were covered by them.

It is not enough to write history, and we do not claim to be doing so, by speculating and relying on legal texts alone. It is true that laws reflect existing conditions necessitating regulation and influencing the direction of business development, but that does not absolve us from researching the facts relevant to these conditions and the practices associated with them. We view these legal texts as indicators that shed some light on existing conditions, and pave the way for professionalisation of non-codified traditional practices in certain areas.

We concede that professionalism does not always arise by the force of law as the history of some professions in the West in particular witness Professionalisation, through defining terms of entry, for example, developed from within the professions themselves. The promulgation of the Dallaleen Law points to the emergence of specialised activities in the service sector. One is inclined to the view that legislative intervention in regulating business activities contributes to shaping or re-shaping of existing practices. And this is why this particular piece of legislation, like others, is so significant.

However, despite the legal framework for regulating intermediation and as far as insurance is concerned, intermediation did not develop for reasons that need to be investigated. The activity, in its evolution in the 1950s and 1960s, was reduced to the work of agents who were tied to insurance companies that survives to this day but without much weight.[3]

The 1935 Law, however, survived for over four decades until it was repealed by the Delalah Law Number 58 of 1987. Significantly, article 2 of the new law defined four categories of intermediaries: estate agency, buying, selling and leasing vehicles, auctioneering and buying and selling agricultural and industrial products and other properties. Insurance intermediation was not included among them. By now, insurance intermediation has lost all legal recognition.

One wonders if the chambers of commerce in Baghdad, Basra and Mosul kept records. If records do exist, they would be of great value to economic historians in estimating the number of intermediaries, their specialist activities, identities, revenues, etc.

If our analysis were correct, then Law of Dallaleen No. 64 of 1935 would be the first of its kind in regulating insurance broking business in Iraq. But this has to be qualified by virtue of the existence of previous regulations: Dallaleen and Brokers Order dated 26-7-1304 [20 April 1889] and its Supplement dated 25-8-1306 [26 April 1889]. The word “Brokers” in the title of the order (plural: simsareen, singular: simsar) here might not necessarily stand for “insurance brokers.” This of course needs further investigation.

We hope that colleagues concerned with the history of insurance in Iraq, and generally with Iraq’s economic history, will follow-up this and other related topics.

London July 2010
English Translation of the
Dallaleen Law No. 64 of 1935


The Arabic text of this law can be read by using this link:


_________________________________


We the King of Iraq
With the agreement of the Senate and the House of Representatives ordered the promulgation of the following law:


Article 1
The following words and expressions have the meanings set opposite thereto:

Intermediation (Delilah) – al-Wassatah [intermediation, brokerage] for concluding contracts or facilitating civil or commercial transactions concerning movable and immovable property, bonds and [insurance] policies and banknotes of different types and other branches deriving from such transactions.

Intermediary (Dallal) – he who has taken on intermediation as a profession."

Chamber of Commerce - Chamber of Commerce in the region where the Dallal practices his regular work.

Article 2
The Dallal must meet the following conditions:

A – must not be less than twenty-one year of age and have Iraqi nationality.

B - Not to have been convicted of a felony or misdemeanour involving moral turpitude unless he has regained the rights denied to him (sic) [i.e. unless the conviction was spent].

C – Not made bankrupt unless he has restored his solvency.

D - Known for his integrity and good conduct.

E – Competent in reading and writing in Arabic or employs a person with such competence.

Article 3
The Dallal who meets the conditions set forth in Article 2 must register with the Chamber of Commerce and renew the registration annually and has a certificate evidencing his registration containing his photograph and the categories of Delalah for which he is licensed to practice.

Article 4
A – The Dallallon [plural of Dallal] are classified by the Chamber of Commerce into five categories and the Dallal can object to [his] classification by the Chamber within one year.

B – The Dallal pays an annual registration fee to be set by a directive.

C - Part of the year is considered [a full] year for the purpose of registration.

Article 5
A Dallal registered with the Chamber of Commerce is permitted to practice his business throughout Iraq.

Article 6
The Dallal must comply with the following obligations:

(Class Three or lower Dallals are exempt from all or some of these obligations based on a special directive.)

A - Maintain a register with numbered pages the first and last pages of which to be stamped and approved by the Chamber of Commerce without charge according to the form approved by the Chamber of Commerce after approval by the Minister of Finance. Transactions are to be entered in Arabic by using ink or copying pencil.

B - Enter all transactions brokered in the logbook daily with their details and the result gained by such transaction.‏

C - Avoid erasing and deletion or tearing of a page from the contents of the logbook.

D - Does not leave a space between lines or more than the usual space between one transaction and another.

E - Does not leave a blank page between the pages in which transactions have been entered.

F - Keep logbooks that are full, for a period of not less than ten years from the entry date of the last transaction.

G - Presents the license to a court of law when the court so decides.

H - Presents the license, on demand, to the relevant departments upon their request.

I - Submits to the Chamber of Commerce a statement in writing if he wishes to leave the profession within a year.

Article 7
A – a person who engages in Delalah in professions that by law are not to be the subject of Delalah, or practises Delalah without registering with the Chamber of Commerce shall be penalised by a court of law initially by a fine not exceeding forty dinars, and when the same [offence] is repeated by a fine not exceeding sixty dinars, or by imprisonment for a term not exceeding three months.

B – A person who continues to engage in Delalah after the end of the license year and before the renewal of the license or before payment of the fee shall be penalised initially by a fine not exceeding twenty dinars and on recurrence by a fine not exceeding forty dinars, or by imprisonment for a term not exceeding one month.

C – The Dallal who violates one of the obligations mentioned in Article 4 shall be penalised by the court initially by a fine not exceeding five dinars and on recurrence by a fine not exceeding ten dinars.

D – The Chamber of Commerce, at the request of the Minister of Finance or the stakeholders, bars the Dallal from doing business for a period not exceeding one year if he has neglected one of the obligations in Article 6 and that in addition to the sentence imposed by the court.

Article 8
The name of the Dallal will be permanently removed from the register of the Chamber of Commerce if he has been in breach of trust or has damaged the interests of those for whom he has acted as a broker or used deception and cheating in his dealings, after he is proven guilty in court and [the verdict] publicised in the press.

Article 9
The testimony of a Dallal who has engaged in Delalah without a licence does not count in court in respect of the transactions that he has brokered.

Article 10
It is not permissible for the Dallal to conduct business for his own account, and if in breach will be punished in accordance with paragraph B of Article VII.

Article 11
It is not permissible for government departments or municipalities to use a Dallal who is not registered with the Chamber of Commerce.

Article 12
The Dallal collects a fee not exceeding the ratios specified by a special directive.

Article 13
This law also applies to the Dallal who works for a sole trader or company or more than one company.

Article 14
The provisions of this law apply in areas, designated by a special bylaw, that have chambers of commerce.

Article 15
The Dallaleen and Simsareen Order dated 26-7-1304 and its Supplement dated 25-8-1306 is repealed.

Article 16
This Law shall become effective on 1 April 1936.

Article 17
The Minister of Finance and [the Minister of] Justice shall implement this law.

Written in Baghdad on the twelfth day of the month of Ramadan in the year 1354 and the eighth day of the month of December 1935.

Ghazi
Rasheed Ali, Deputy Minister of Justice
Raouf Al-Bahrani, Finance Minster
Yaseen Al-Hashimi, Prime Minister

Published in the Official Gazette number 1479 on 23-12-1935.

NOTES
* The present paper is an extensively revised and expanded version of the original Arabic that I have posted to the Iraq Insurance Review blog. I wrote this and other isolated article to remind the reader that knowledge of the past is important not only to preserve memory of the past but also to stress that accumulation is a pre-condition for progress. The ideology of ‘destroy and rebuild’ has placed a heavy toll on the advancement of Iraq.

[1] The bolisat, the plural form of bolisah, can be translated as “policies” plural of “policy” as in insurance policy. It seems that the word "bolisat" (plural) and "bolisah" (singular) was commonly used at that time as the word "Bolesat" is mentioned in the Insurance Companies Act No. 74 of 1936 in conjunction with word "sukkook” (instruments, documents) as follows:

“Article 3”

1. The Minister of Finance must suspend the license ….. or cancel the license in each of the following circumstances:

A - If the [insurance] company or its agent violated the provisions of Law No. 74 of the year (1936) in any way.

B - if it is conclusively proven that one of the sukkook-holders (sic.) [policyholders] bolesat al-Tameen [insurance policies] in Iraq has made a claim against the insurance company, which is not contested, and the company or its agent neglected the claim for ninety days or if the agent or the company declined the implementation of a peremptory judgement.” [Emphasis added]

Here we see the use of the Arabic word “sukkook" (plural of “sukk") and the foreign word "bolesat [policies] of insurance" as synonymous.

The word "sukk" is used in common parlance in Iraq as equivalent to the words "cheque" (bank cheque) and "document" as in the expression “sukk al-Entidab" (the Mandate Document or Instrument."

But the word “Bolisah” is also common in shipping as in Bolisat al-Shahan (Bill of Lading).

Based on the above the word Bolisat under Article 1 of the Dallaleen Law of 1935 does not, strictly speaking, stand for insurance policy. This linguistic digression is meant to show that idiomatic use of words was not rigorously applied.

[2] For an extended comment on word simsareen (plural of simsar: middleman, broker, intermediary), readers of Arabic can refer to my article “Concerning Intermediation and Insurance Intermediation in Iraq," Iraq Insurance Review,
http://misbahkamal.blogspot.com/2008/09/blog-post.html

[3] Misbah Kamal, Munther Al-Aswad & Fouad Shamkar, “Insurance Agencies in Iraq: a preliminary attempt at stimulating research” (in Arabic), Iraq Insurance Review, January 2010,
http://misbahkamal.blogspot.com/2010/01/1.html.

Mohammed Al-Kubaisi, “Insurance Agencies: an approach to understanding insurance service,” (in Arabic) Iraq Insurance Review, January 2010, http://misbahkamal.blogspot.com/2010/01/blog-post.html


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). At present, he works for a London-based international insurance broking house. He has co-authored Arabic translations of insurance books and contributed to compiling an English-Arabic insurance dictionary. Kamal manages the Iraq Insurance Review blog http://misbahkamal.blogspot.com/ and is part of the Iraq History group's translators' team.



Wednesday, July 14, 2010

The History of Arabs in IRAQ


 


The History of Arabs in IRAQ

Wafaa' Al-Natheema

The history of Arabs in Iraq can be traced back to ancient Mesopotamia. Arabs were mentioned in Assyrian manuscripts. They were known to be talented singers and musicians. In “Ancient and Oriental Music” book edited by Egon Wellesz, chapter V, page 236, “The Music of Ancient Mesopotamia”, Henry George Farmer states, “…It has been said that ‘the old danced whilst the young made music. One imagines that there were toil songs among the ancient Semites, as we know in the ‘well song’ of Numbers xxi.17. Singers and drummers, in a picture of Assyrians felling palm-trees, certainly appear to be facilitating labour. Indeed an Assyrian annalist gives a picture of the Arabs who, as prisoners of war, were working as slaves at Nineveh, where they sang their native songs to relieve their sorrows. Their exotic music fascinated the idle Assyrians who begged for more.”

The earliest mention of the term ‘Arab’ was recorded during the reign of the Assyrian King, Salmanassar III (858-824 BCE) when Assyrians were at war near Al-Asi River, north of Homa in Syria. The war was between the Assyrian army on one side and the Arameans, Phoenicians and Arabs on another; all backing the king of Damascus. The war ended in favor of the Assyrian King who wrote: “Qarqar is the capital; I burnt and destroyed it: 1200 Knights, 20,000 soldiers and 1000 camels for the Arab Jandibo….”

During the Assyrian king, Tiglat Pilesar III (745-727 BCE), who was mentioned in the Torah, Arabian queen, Zabiba, was recorded as follows: “…and so the Aribi [meaning Arabian] queen, Zabiba paid taxes …” to the Assyrian king Pilesar III. In his reign, there was also a mention of another Arabian queen, Sams, Shams or Shamsa.

Arabs were also mentioned during King Sargon II (721-705 BCE). He was quoted as saying, “The distant Arabs who live in the Badiya [or Peninsula] don’t have a king or ruler and they never paid taxes to any king before me.”

In documenting the war against Babylonians, Assyrian King, Sencharib (705-681 BCE) stated that, “he took soldiers of an Arabian army, led by Basqanu, as prisoners”. Basqanu was the brother of Arabian queen Yatie. In 691 BCE, Sencharib also mentioned that he went to war against another Arabian queen, Talkhono, and later against the Arab King, Khazayli.

The term ‘Arab’ was recorded in Assyrian manuscripts as Aribi, Arbi, Arabi or Urbi. Arabs were also mentioned numerous times in the Torah as well as ancient Persian, Greek and Roman manuscripts.

Therefore, the statements indicating that Arab history began with Islam and in the Arabian Peninsula are far from the truth. In ancient times, and depending on who was in power and were they lived, Arabs spoke their native language, Arabic, and the languages of the region, Aramaic and Hebrew; all Semitic languages. There is absolutely no evidence whatsoever as to which of the Semitic languages appeared or was spoken first. One thing is certain: Only Arabic (of all Semitic languages) is still used today in its original form (more than one and half thousand years) in books, newspapers, TV/radio, films, the UN and religious mosques and institutions with the largest number of speakers (among other speakers of Semitic languages).

Jaroslav Stetkevych, an emeritus professor of Arabic at the University of Chicago, described Arabic language as follows: “It has lived for one millennium and a half essentially unchanged, usually gaining, never completely losing. Venus-like, it was born in a perfect state of beauty, and it has preserved that beauty in spite of all the hazards of history and all the corrosive forces of time. It is true that there was not always that Praxitelean limpidity of line about it. Figuratively speaking, it has known its Gothic, its Renaissance and its Baroque periods. It has known austerity, holy ecstasy and voluptuousness, bloom and decadence. It exuberated in times of splendor and persisted through times of adversity in a state of near-hibernation. But when it awoke again, it was the same language. The fact that Arabic long survived and still had the vitality to burgeon a new might be due to religious and social factors, but the quantitative ability to expand and the qualitative capacity to attain perfection and to maintain its essential characteristics are merits of the language exclusively."

Ancient Arabs followed paganism and practiced Judaism, Christianity and later Islam. At the present time, Christian Arabs live in Iraq, Syria, Lebanon, Jordan, Palestine and Egypt. Their history is parallel to that of Christianity in the “Middle East”

In the 20th Century and with the European and later Euro-American colonization, the terms ‘Arab Jew’ or ‘Jewish Arab’ became a matter of debate to the extent of rejecting these terms by Ashkenazi Jews (mostly eastern European converts to Judaism), Zionists and pro-Zionists in the industrial west. With this rejection along with discrimination against Jewish Arabs (especially in Israel) and the mistreatment of Arabs in general by the industrial west and Israel, the history and contributions of Arabs in general and Jewish Arabs in particular have been marginalized. The cultural identity and contributions of Jewish Arabs became near extinct.

The interference of Ashkenazi Jews, implementers and funders of Zionism, in the lives of Jewish Arabs has been mentioned in depth by Naem Giladi and Ella Shohat, Iraqi Jews. In his book, “Ben Gurion’s Scandals,” Giladi mentions in details how the Zionists used terror to force Iraqi Jews to leave Iraq for Israel and used as cheap labor. The book mentions handful other crimes to ensure that the Israel project becomes a success. In a publication by the Link, in 1998, Giladi was quoted stating, “I write this article for the same reason I wrote my book: to tell the American people, and especially American Jews ,that Jews from Islamic lands did not emigrate willingly to Israel; that, to force them to leave, Jews killed Jews; and that, to buy time to confiscate ever more Arab lands, Jews on numerous occasions rejected genuine peace initiatives from their Arab neighbors.I write about it because I was part of it.

In my documentary film, “The Other Arabs”, I interviewed Naem Giladi and ten other Iraqi Jews about their lives (in Iraq and later in the USA, UK or Israel) and contributions. With the exception of four, seven were born and raised in Iraq, two of them still live in Israel, and I was able to interview them when they were visiting their son in New York. In one of the (two) trailers posted on Youtube and the website of the Institute of Near Eastern & African Studies (INEAS), Naem Giladi states (translated from Arabic): “Iraqi Jews refused to leave Iraq. As a result, the Zionists began to use explosives near several Jewish buildings concluding with Masouda Shemtov Synagogue. The type of bombs used was the same as those stored in temples by Zionists. One of the components used in the bombs was not available in Iraq. It was brought from Israel by Zionists to use in Baghdad.”


 
Sources:
1. “Ancient and Oriental Music,” edited by Egon Wellesz, Oxford University Press.
2. “The Link,” Volume 31, Issue 2, April-May 1998.
3. Tareekh al-Musiqa al-Arabiyah” by Subhi Anwar Rashid, Bavaria Institute, 2000.