Regulation of Insurance Operations
Article Twelve
The Company and all Insurance and Reinsurance Services Providers shall conduct their business according to professional and ethical standards.
Article Thirteen
The Company and all Insurance and Reinsurance Services Providers shall comply with all Saudi accounting standards approved by SAMA. In the absence of such standards, the company shall apply international accounting standards.
Article Fourteen
The Company and all Insurance and Reinsurance Services Providers shall obtain prior written approval of SAMA before dealing with Lloyd’s insurance brokers or foreign companies to cover risks that cannot be covered through a licensed Company in the Kingdom.
Article Fifteen
The Company and all Insurance and Reinsurance Services Providers, in accordance with all rules and regulations issued by SAMA to that effect, shall:
1. Adopt an internal policy and procedures to combat economic crimes including money laundering.
2. Apply “Know Your Customer” standards.
3. Notify the Financial Intelligence Unit (FIU) in writing of any suspected transactions, in accordance with the designated form designed by SAMA with a copy submitted to SAMA.
Article Sixteen
The Company and all Insurance and Reinsurance Services Providers shall provide complete and accurate information regarding their insurance products and services to SAMA. Written prior approval by SAMA is required for marketing all insurance products and services.
Article Seventeen
The Company shall comply with all conditions set by SAMA for specialized inter-companies insurance funds. No given Company may subscribe to such funds outside the Kingdom without obtaining SAMS’s written approval.
Article Eighteen
The company shall provide SAMA with copies of reinsurance agreements on an annual basis. SAMA may comment on these agreements and request amendments if deemed necessary.
Article Nineteen
1. The Company shall not deal with any unlicensed Insurance and Reinsurance Services Providers, and Insurance and Reinsurance Services Providers shall not deal with any unlicensed Person Providing Insurance and reinsurance Services. A signed written agreement outlining the scope and relationship between the Company and Insurance and Reinsurance Services Providers is required.
2. Insurance and Reinsurance Services Providers and their employees shall not deal with an unlicensed Company, and they shall not prejudice other company’s products when providing insurance services to the consumers.
3. The Company or an Insurance and Reinsurance Services Providers shall have a valid contract with any Person they are dealing with.
Article Twenty
First: The Company shall appoint an Actuary that holds the designation of a Fellow, or seek the services of an actuary or an actuarial firm after obtaining a written permission from SAMA. The Company’s Actuary shall undertake the following duties:
1. Obtain all required information and particulars from the previous Actuary.
2. Examine the Company’s financial position.
3. Evaluate the Company’s ability to meet its future obligations.
4. Determine adequate risk retention level.
5. Price the Company’s insurance product.
6. Determine and approve the Company’s technical provisions.
7. Provide advice and recommendations related to the Company’s investment policy.
8. Any other actuarial recommendations.
Second: The Actuary shall be professionally liable for his/her advice and technical services provided to the Company, and shall upon the Company’s request, furnish the Company’s management with the following particulars and documents:
1. Sound actuarial information and statements about the company’s present and future financial position.
2. Annual report, within sixty days from the expiry date of the company’s fiscal year reflecting the adequacy of the Company’s technical provisions.
3. Annual report, within sixty days from the expiry date of the Company’s fiscal year reflecting the pricing adequacy of the insurance products.
4. Company’s investment returns analysis.
5. Insurance portfolio development analysis.
6. Cost Analysis
7. Report reflecting the adequacy of matching assets with liabilities.
8. Positive and adverse underwriting policy development status.
The Company shall ensure compliance with all required actuarial duties and reports. Otherwise, SAMA shall appoint an actuary at the company’s expense to undertake these actuarial duties.
Third: An external auditor shall review actuarial reports that present immediate or future risks facing the Company, and SAMA shall be provided with copies of these reports in a timely manner.
The Company’s Actuary shall, in the presence of immediate or future risks facing the Company, submit a report on an urgent basis directly to the company’s Board of Directors. The Board of Directors shall examine the report and recommend corrective actions, and forward all related information to SAMA within fifteen days from receiving the report.
Article Twenty-One
The Company that underwrites Protection/Savings insurance business class along with other classes of insurance shall comply with the following requirements:
■ Appoint a qualified risk manager for its Protection/Savings insurance class that is independent from the other classes of insurance business
■ Appoint a qualified reinsurance manager for its Protection/Savings insurance class that is independent from the other classes of insurance business.
■ Separate all investments and provisions for its Protection/Savings insurance business from the other classes of insurance business.
Article Twenty-Two
A Person shall not engage in more than one insurance or reinsurance related service without the written permission of SAMA.
Article Twenty-Three
An Insurance and Reinsurance Services Provider shall have a permanent office where all insurance related registers and documents used in their operations are kept, SAMA must be notified within thirty (30) days of any changes in the permanent office location. An exception is made for Actuaries and Advisors residing outside the Kingdom with written permission from SAMA.
Article Twenty-Four
Insurance Brokers and Agents shall provide sound advice to the insured and shall disclose all facts and risks associated with the insurance policy that will be issued by the Company.
Article Twenty-Five
Insurance Brokers and Agents shall provide the insured with adequate information regarding the insurance policy and that there must be no inducement or deception. The information provided must include the following as a minimum:
a. Limits of insurance coverages.
b. Policy exclusions.
c. Contribution or Premium amount (s).
d. Inception and expiration dates (policy period) of the policy.
e. Policy conditions.
f. Name of the Company issuing the insurance policy.
Article Twenty-Six
Insurance and/or Reinsurance Brokerages shall:
1. Disclose to the insured the commission and/or fees earned for the services provided.
2. offer to place reinsurance business with local reinsurance Companies’ before placement with a foreign reinsurer.
3. Not allow an insurance broker to combine insurance and reinsurance business activities to avoid conflict of interest that is harmful to the policyholder. Commissions and fees of insurance and reinsurance business shall be separated.
4. Serve the insured’s interests by striving to obtain the most appropriate available coverage and price.
5. Disclose to the insured in advance all benefits under the policy as compared to other similar policies in terms of coverages and prices.