| 1. | The Company’s financial statements, at a minimum, shall consist of; statements of financial position for insurance operations and shareholders accounts, profit and loss statements for insurance operations, shareholders’ income statements, statement of shareholders’ equity, statements of cash flows for insurance operations and shareholders’ cash flow statement.
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| 2. | The following shall be regarded by the Company upon preparation of the statements of insurance operations:
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| | a. | Determine earned premiums, and income generated from reinsurance commissions, and other insurance operations revenues.
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| | b. | Determine the incurred indemnification.
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| | c. | At the end of each year, the total surplus representing the difference between (a) and (b), less any marketing, administrative expenses, the necessary technical provisions, and other general expenses related to the operation of insurance shall be specified.
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| | d. | Company’s net surplus shall be determined by adding or subtracting the investment return of the policyholder’s invested funds, and subtracting the general expenses related to the policyholder’s portion of the investment activities.
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| | e. | 10% of the net surplus shall be distributed to the policyholders directly, or in the form of reduction in premiums for the next year. The remaining 90% of the net surplus shall be transferred to the shareholders’ income statement.
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| | f. | The shareholder’s net income shall be transferred to the statement of shareholders’ equity.
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| | g. | Twenty percent (20%) of the net shareholders’ income shall be set aside as a statutory reserve until this reserve amounts to 100% of the paid capital, and
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| 3. | SAMA’s written approval must be obtained for policyholders’ net surplus distribution and timing.
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