All companies that do not hold sufficient Admissible Assets to cover their Total Required Margin before application of the Minimum Capital Requirement must include an additional loading in the medical and motor premium rates that they charge.
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This is based on the data presented in Form 31 in the most recent Quarterly or Annual Returns, subject to any amendments required by SAMA.
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The Financial Condition Ratio is defined as the Net Admissible Assets / Total Required Margin.
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Financial Condition Ratio = (Form 31, Line 39, Column A) / (Form 31, Line 43, Column A)
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If the Financial Condition Ratio is greater than or equal to 1 then no loading shall be applied to the premium rates.
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If the Financial Condition Ratio is less than 1 then a Financial Condition Loading must be applied
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The Financial Condition Loading for Medical Expenses is determined as:
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16% x (1- Financial Condition Ratio)
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The Financial Condition Loading for Motor is determined as:
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20% x (1- Financial Condition Ratio)
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Both Loadings shall be rounded to the nearest whole percentage point.
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Note “Column A" refers to the Form Label, not the Excel Column.
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