Insurance laws Saudi Arabia
Saudi Arabia's insurance sector is governed by a robust legal and regulatory framework aimed at ensuring market stability, consumer protection, and alignment with Sharia principles.
🏛️ Regulatory Authority
The Insurance Authority (IA) serves as the central regulatory body for the Kingdom's insurance industry Established by Royal Decree No. 85 on 28/01/1445 H (August 15, 2023), the IA commenced operations on November 23, 2023 On March 4, 2024, it assumed full responsibility for all insurance-related matters, including health insurance, previously overseen by the Saudi Central Bank (SAMA) and the Council of Health Insurance (CHI)
Cooperative Insurance Companies Control Law This law, issued by Royal Decree on July 31, 2003, governs the operation of cooperative insurance companies in Saudi Arabi. It mandates that insurance activities align with Sharia principles and outlines the licensing process, capital requirements, and governance structures for insurance companies
Implementing Regulations Issued by the IA, these regulations provide detailed provisions on various aspects of the insurance business, including corporate governance, risk management, outsourcing, investment, and anti-money laundering measure. They also cover specific insurance products such as motor, marine, and health insurance
🧾 Licensing and Operational Requirements
*Licensing: Insurance companies must obtain a license from the IA to operate in Saudi Araba The licensing process includes demonstrating compliance with capital requirements, governance standards, and operational capabilities
*Capital Requirements: he minimum paid-up capital for insurance and reinsurance companies is set at SAR 300 million, as specified in the Implementing Regulations
*Ownership and Governance: Insurance companies must be joint-stock companies, and any changes in ownership exceeding 5% must be reported to the A The IA has the authority to approve board members and senior managers of insurance companies
🛡️ Consumer Protection and Dispute Resolution
*Consumer Rights: Policyholders and beneficiaries retain all rights under existing laws and regulatin. The IA ensures the protection of these rights and the stability of the insurance sector
*Dispute Resolution: The Committee for Resolution of Insurance Disputes and Violations (IDC) continues to handle disputes related to insurance contrat. the IA manages the IDC, which remains operationally independent tment and Market Access
Foreign Ownershi: Foreign investors can fully own insurance companies in Saudi Arabia, subject to alignment with the provisions of the Foreign Investment Law
Market Participatio: Investors can engage in the Saudi insurance market by establishing new companies, investing as shareholders in licensed entities, or setting up foreign branches limited to insurance or reinsurance activities
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