Financial Services Supervision Law (Insurance), 5741-1981
חוק הפיקוח על שירותים פיננסיים (ביטוח), תשמ"א-1981
Published: 1981-04-23Consolidated Hebrew text as of 2026-07-26 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Section F: Control and Means of Control
Definitions§
31a.
In this Section –
"designated bond" – any of the following:
(1)a bond issued by the State of Israel under the Loan Law (Insurance Companies), 5723-1962;
(2)a bond guaranteed by the State of Israel issued within the framework of linked life insurance agreements;
"life insurance" – as defined in section 54(e);
"material holding in the long-term savings sphere" – control of a market share exceeding fifteen percent of the total value of all long-term savings assets; for this purpose, the market share controlled by a person shall be calculated as the total value of the long-term savings assets managed by that person and by all institutional bodies under that person's control, including assets managed as aforesaid on behalf of other institutional bodies, and for the purposes of a person who controls together with others, the entire value of those assets shall be attributed to each and every one of the controlling persons separately;
"insurer" – including a corporation in which both of the following apply:
(1)it holds more than fifty percent of a particular type of means of control in a particular insurer;
(2)more than ten percent of all its assets are means of control in insurers or in insurance agents;
"long-term savings assets" – the assets detailed as follows:
(1)assets of provident funds, except veteran funds and central provident funds for severance pay or central provident funds for sick pay;
(2)assets held by insurers to cover yield-dependent liabilities in life insurance;
(3)assets held by insurers to cover their liabilities under life insurance plans that grant the insured a guaranteed yield, and in respect of which the insurer is not entitled, by reason of the monies deposited therein, or by reason of a part thereof, to designated bonds;
"corporate agent" – including a pension adviser that is a corporation, engaging in brokerage under section 24(a)(2).
Control and holding of means of control in an insurer and in a corporate agent§
32.
(a)A person shall not hold more than five percent of a particular type of means of control in an insurer, except pursuant to a permit granted by the Commissioner and subject to the conditions prescribed by the Commissioner; the Minister of Finance may, for special reasons, prescribe additional conditions for the grant of such permits.
(a1)A person shall not agree with another regarding their voting for the appointment of a director in an insurer, including regarding their voting for the termination of the director's tenure, except pursuant to a permit granted by the Commissioner; this provision shall not apply to a group of holders within the meaning thereof in section 41k(a)(3)(c), with respect to voting for the appointment of a director nominated as a candidate by them pursuant to that section, nor to a holder of means of control who has agreed with another that the other shall vote in the holder's name and on the holder's behalf without discretion, as the holder of the means of control has instructed, provided that if the other holds means of control in the insurer in the other's own right, the other shall not vote in the name and on behalf of more than one other holder.
(b)A person shall not control an insurer or a corporate agent except pursuant to a permit granted by the Commissioner and subject to the conditions prescribed by the Commissioner; the Minister of Finance may, for special reasons, prescribe additional conditions for the grant of such permits.
(b1)In granting a permit under this section, the considerations set out in section 17 shall be taken into account, with the necessary modifications, including the suitability of the applicant to control, to hold the quantity of means of control as requested, or to agree regarding voting for the appointment of a director, including the termination of the director's tenure, including the applicant's business experience, other occupations and businesses, financial soundness and reliability, as well as the possible consequences of granting the permit on the existing or future control of the insurer or the corporate agent; the fact that the applicant is a cooperative society shall not be taken into account within the framework of the considerations under this subsection.
(b2)A permit to control an insurer shall not be granted if, following the grant of the permit, the applicant for the permit would have a material holding in the long-term savings sphere.
(b3)A person who holds a permit under subsection (b) to control an insurer holding a licence as referred to in section 15(a1) shall not be granted an additional permit under subsection (b) to control another insurer holding such a licence, except in accordance with rules prescribed by the Commissioner.
(c)A permit granted under this section is also valid in respect of every corporation under the control of the permit holder.
(c1)A person shall not hold a material holding in the long-term savings sphere, except by reason of one of the following:
(1)a change in the market value of the long-term savings assets managed by that person or by the institutional bodies under that person's control;
(2)a change in the total value of the long-term savings assets;
(3)the joining of insured persons, or of members as defined in the Provident Funds Supervision Law, to life insurance plans or to provident funds in a manner that increases the long-term savings assets managed by that person or by the institutional bodies under that person's control, except such joining following the entering into an agreement with another institutional body or a merger with it.
(d)The provisions of subsections (a) and (b) shall not apply –
(1)to a person who holds means of control by virtue of a transfer by operation of law;
(2)to a corporation that has acquired means of control from a person who controls it.
(e)(Repealed)
(f)The provisions of this section shall not apply to means of control in a corporation that is a foreign insurer, unless the holder is a resident of Israel.
(g)The provisions of this section, except subsections (b2) and (c1), shall also apply to the holding of means of control in an insurer as security for an obligation, except means of control that are bona fide intended to serve as security for an obligation in the hands of a banking corporation and whose rate in a securities account of any customer does not exceed 0.001% of that type of means of control.
Prohibition on a Significant Real-Sector Corporation Controlling and Holding Means of Control in an Insurer that is a Significant Financial Body§
32a.
(a)In this section –
"financial body" and "real-sector corporation" – as defined in section 28 of the Law for the Promotion of Competition and Reduction of Concentration;
"significant financial body" – a financial body in which one of the following applies:
(1)it is listed on the list of significant financial bodies;
(2)the conditions set out in section 29(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration are met with respect to it, even if it is not listed on the list of significant financial bodies;
"list of significant financial bodies" – the list of significant financial bodies published pursuant to section 29 of the Law for the Promotion of Competition and Reduction of Concentration;
"list of significant real-sector corporations" – the list of significant real-sector corporations published pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration;
"controls", in a real-sector corporation – including holding a controlling block as defined in the Companies Law, in a real-sector corporation in which there is no other controlling shareholder;
"significant real-sector corporation" – a real-sector corporation in which one of the following applies:
(1)it is listed on the list of significant real-sector corporations;
(2)the conditions set out in section 30(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration are met with respect to it, even if it is not listed on the list of significant real-sector corporations; however, for this purpose, the authority vested in the Commissioner of Competition in the concluding part of the definition of "determining sales turnover" in section 30(e) of that Law shall be vested in the Commissioner;
(3)the conditions set out in section 30(a)(2) of the Law for the Promotion of Competition and Reduction of Concentration are met with respect to it, even if it is not listed on the list of significant real-sector corporations; however, for this purpose, the authority vested in the Concentration Reduction Committee in the concluding part of the definition of "determining credit" in section 30(e) of that Law shall be vested in the Commissioner.
(b)A significant real-sector corporation or a person who controls it shall not control an insurer that is a significant financial body and shall not hold more than ten percent of a particular class of means of control in such an insurer, and if such an insurer is an insurer with no controlling shareholder – shall not hold more than five percent of a particular class of means of control in it; the Minister of Finance may prescribe, for the purposes of this subsection, a rate lower than ten percent, provided it shall not be less than five percent; in prescribing such a rate, account shall be taken, inter alia, of the structure of the long-term savings sector.
(c)A person who holds more than five percent of a particular class of means of control in a significant real-sector corporation (in this section – the holder) shall not control an insurer that is a significant financial body; for the purpose of calculating the holding rate of such a holder, holdings of the insurer, of financial bodies that control it or are controlled by it, or of other financial bodies under the holder's control shall not be counted; for the purpose of calculating the determining sales turnover and the determining credit of the real-sector corporation pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration, a real-sector corporation that is not the holder, or a corporation that is not a real-sector corporation in which the holder holds more than five percent of means of control, or a corporation that is not a corporation controlled by such a corporation, shall not be taken into account.
(d)Where a significant real-sector corporation or a person who controls it controlled an insurer that is a significant financial body or held means of control in such an insurer, or where a person who holds means of control in a significant real-sector corporation controlled an insurer that is a significant financial body, in contravention of the provisions of this section, that person shall sell the means of control it holds so that it holds no means of control of any class above the rate permitted for holding under this section, and the Commissioner may give directions in this regard, including directions as referred to in paragraphs (1) to (4) of section 34(a), with the necessary modifications; the provisions of section 34(d) and (e) shall apply for this purpose, with the necessary modifications; where the Commissioner has given directions pursuant to this subsection, notice thereof shall also be sent to the insurer.
(e)Without derogating from the Commissioner's powers to require information under this Law, the Commissioner may, for the purpose of implementing this section –
(1)require a person who controls or holds means of control above the rates referred to in subsections (b) or (c) in an insurer, or a person who seeks to hold or control as aforesaid, to provide information regarding the total value of assets of that person and of every person whose total value of assets is taken into account for the purpose of determining a financial body as a significant financial body; for this purpose, "total value of assets" – as defined in section 29(d) of the Law for the Promotion of Competition and Reduction of Concentration;
(2)require a person who controls or holds means of control above the rates referred to in subsections (b) or (c) in an insurer that is a significant financial body, or a person who seeks to hold or control as aforesaid, to provide information regarding sales data and credit data of that person and of every person whose determining sales turnover or determining credit is taken into account for the purpose of determining a real-sector corporation as a significant real-sector corporation, provided that the Commissioner shall not require information under this paragraph regarding credit received by an individual unless the Commissioner has first required information regarding credit received by the relevant corporations and has found that such information together with the other information available to the Commissioner is insufficient for the purpose of implementing this section; for this purpose, "credit", "determining credit" and "determining sales turnover" – as defined in section 30(e) of the Law for the Promotion of Competition and Reduction of Concentration.
(f)The provisions of this section shall not apply with respect to means of control in a corporation that is a foreign insurer, unless the holder is a resident of Israel.
Transfer of means of control§
33.
A person holding means of control in an insurer corporation or in a corporate agent shall not transfer them to another, knowing that the transferee requires a permit under section 32 and does not hold that permit.
Revocation or modification of a permit§
33a.
(a)The Commissioner may revoke or modify a permit granted by the Commissioner under section 32, after consultation with the Committee, if the Commissioner had reasonable grounds to assume that one of the following applies:
(1)a material condition of the permit has ceased to be met by the permit holder, or the permit holder has breached such a condition;
(2)the permit holder is a material holder in the long-term savings sector, otherwise than for the reasons listed in section 32(g1);
(2a)the permit holder is a significant real corporation or a person who controls it, holding means of control in an insurer that is a significant financial body, or controlling it, in contravention of the provisions of section 32a(b);
(2b)the permit holder holds means of control in a significant real corporation and also controls an insurer that is a significant financial body, in contravention of the provisions of section 32a(c);
(3)the permit holder or an office holder therein has been convicted of an offence whose gravity, nature or circumstances justify revocation or modification of the permit;
(4)in the case of a permit holder that is a corporation – an order for its winding up has been made, or a receiver has been appointed over its assets or a material part thereof due to non-payment of a debt; and in the case of a permit holder who is an individual – a receiving order has been made against that individual in bankruptcy proceedings, or that individual has been declared legally incompetent;
(5)there is a substantial concern of harm to the stability of the insurer, or a concern of harm to the public interest, if the permit is not revoked or modified.
(b)The Commissioner shall not modify or revoke a permit as referred to in subsection (a), unless the permit holder has been given an opportunity to state arguments before the Committee, in the manner directed by it, and to remedy the breach within a period to be determined by the Commissioner, which shall not be less than 30 days.
(c)
(1)Where an indictment has been filed against a permit holder or an office holder therein, for an offence which, by reason of its gravity, nature or circumstances, the Commissioner considers that a conviction would justify revocation or modification of the permit, the Commissioner may, after consultation with the Committee and after the permit holder has been given an opportunity to state arguments before the Committee in the manner directed by it, modify the permit and prescribe therein provisions and conditions that shall apply for a period to be determined, and if an indictment as aforesaid has been filed against an office holder in the permit holder – also remove that office holder from office;
(2)The provisions of paragraph (1) shall also apply where a criminal investigation has been opened against a permit holder or an office holder therein in respect of an offence as referred to in that paragraph, provided that the Commissioner has consulted with the Attorney General.
Commissioner's instructions to a person who acted without a permit§
34.
(a)If the Commissioner is of the opinion that a person acted without a permit as referred to in section 32, the Commissioner may, in consultation with the Committee and after that person has been given an opportunity to state arguments before the Committee in the manner directed by it, instruct –
(1)the sale of means of control held by that person, in whole or in part, within a period to be determined, such that that person shall not hold means of control of any type above the rate permitted for holding without a permit under section 32;
(2)that voting rights or rights to appoint directors by virtue of means of control held by that person without a permit under section 32 shall not be exercised;
(3)that a vote cast by virtue of means of control held by that person without a permit under section 32 shall not be counted among the votes in that vote;
(4)the cancellation of the appointment of a director caused by that person.
(b)Where a person has come to hold means of control in an insurer or in a corporate agent by virtue of a transfer by operation of law, at a rate requiring a permit pursuant to the provisions of section 32, the Commissioner may, after giving the holder an opportunity to state arguments, instruct that person to sell those means of control, in whole or in part, within a period to be determined, such that that person shall not hold means of control of any type above the rate permitted for holding without a permit under the provisions of section 32.
(c)Where the Commissioner has instructed, pursuant to the provisions of subsection (b), that means of control be sold, the Commissioner may issue an instruction as referred to in subsection (a)(2) to (4), with the necessary modifications.
(d)If the holder has not sold the means of control in accordance with the Commissioner's instruction under subsections (a) or (b), the District Court may, on the application of the Commissioner, appoint a receiver for the purpose of selling those means of control.
(e)An insurer and a corporate agent shall do their utmost to prevent a person from acting by virtue of means of control held in contravention of the provisions of subsection (b) and section 32.
Reporting on holding of means of control§
34a.
(a)A person holding more than five percent of a particular type of means of control in an insurer or in a corporate agent shall submit to the insurer or to the corporate agent, as the case may be, on 1 April of each year and at such other times as the Commissioner may prescribe, a report on the holding of those means of control in that person's possession and such other particulars as the Commissioner may prescribe, including the following particulars:
(1)in respect of a holder that is a corporation – those who control it, as well as those holding five percent or more of a particular type of means of control therein;
(2)on whose behalf the holder is acting as agent or trustee.
(a1)
(1)A person holding more than one percent of a particular type of means of control in an insurer without a controlling shareholder shall submit to the insurer a report on the holding of those means of control in that person's possession and such other particulars as the Commissioner may prescribe, including the following particulars:
(a)those who control that person, and if there are no controlling shareholders – those holding ten percent or more of a particular type of means of control therein, as well as the directors therein;
(b)on whose behalf the holder is acting as agent or trustee;
(c)in respect of a holder of no more than two and a half percent of a particular type of means of control in the insurer – whether that person objects to the insurer disclosing particulars of that person's holding in its reports, as referred to in section 37 of the Securities Law; if no such notice has been given, that person shall be regarded as having consented to such disclosure, however that person may at any time thereafter give notice of objection, which shall take effect upon the expiry of three months from the date of the written notice to the insurer;
(2)The report pursuant to paragraph (1) shall be submitted on 1 April of each year and at such other times as the Commissioner may prescribe, as well as whenever the holding of a particular type of means of control has reached the rate requiring reporting under that paragraph, and whenever the holding has fallen below that rate.
(a2)The Commissioner may instruct a particular insurer as referred to in subsection (a1)(1) to publish such particulars as the Commissioner may prescribe regarding those holding means of control therein above such rate as the Commissioner may prescribe, provided that such rate shall not be less than one percent, even if those persons have objected to the disclosure of their holdings as referred to in subsection (a1)(1)(c), with reasons to be detailed, provided that such instruction shall take effect no earlier than six months from the date on which the instruction was given to the particular insurer.
(b)The Commissioner may prescribe that a holder of means of control who is subject to a reporting obligation under this section shall submit the report also directly to the Commissioner, and may prescribe that particulars as referred to in subsections (a) and (a1) shall be submitted to the Commissioner alone, at such times as the Commissioner may prescribe.
(c)The provisions of this section shall also apply to a person holding means of control in an insurer or in a corporate agent as a security for an obligation, except for a holder that is a banking corporation.
(d)In this section, "insurer" – as defined in section 1.
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