The State Insurance Controller's Office may grant or withhold insurance licenses and determine the valuation of assets, the form of balance sheets, computations of reserves, and investment composition. Automobile liability insurance, workers' compensation, and aviation liability are compulsory. War-damage insurance is compulsory on buildings and also on some personal property.
The insurance sector is dominated by a few large firms, of which Migdal and Clal Insurance are the most prominent. However, the easy, cartel-like conditions that have characterized the sector for many years are beginning to crumble and new direct insurance companies are gaining market share. In 1997, the US-based AIG group entered the fray, via a direct insurance joint venture with an Israeli communications company, Aurec, which signaled the opening up of the industry to much greater competition from both domestic and foreign entities.
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