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  • 5. The Underwriting Manual

    • 5.1 Submission to SAMA

      The company must submit a corresponding underwriting manual, rating structure and premium rates. 
       
      The rating structure and premium rates must be in Excel spreadsheet format. 
       

    • 5.2 Contents of the Underwriting Manual

      Underwriting Manuals must contain sufficient information so that an external party can follow any quotation produced by an Insurance Company for a risk in that Class of Insurance. 
       
      Underwriting Manuals must: 
       
       •be consistent with the pricing reports
       •be comprehensive and cover all risks
       •be clear and user-friendly
       •fully describe the quotation process
       •include the Underwriting Authority Statement, fully described
       •be consistent with reinsurance arrangements
       •for medical, where appropriate, they must be consistent with TPA agreements
       •for medical, where appropriate, they must be consistent with CCHI requirements
       •for motor, where appropriate, they must be consistent with Najm procedures
       
      All premium rates to be charged must be approved by the actuary. Any adjustments to be made to the base rates determined by the actuary must be documented in the Underwriting Manual. 
       
      The Underwriting Manual shall be signed off by the Chief Underwriter or Chief Technical Officer for the class of insurance, as designated by the company. 
       
      The Actuary should review the Underwriting Manual (excluding the Underwriting Authority Statement) for technical accuracy and consistency with the pricing report, and highlight any inaccuracies. 
       
      The Risk Manager shall also sign off the Underwriting Manual (including the Underwriting Authority Statement) from the process perspective. 
       
      It should be noted that the Company is fully responsible for the accuracy, clarity and comprehensiveness of the Underwriting Manual. 
       
      SAMA requires that companies commit to translating their Underwriting Manual and Underwriting Authority Statement into Arabic by 31 December 2016. The extended timetable granted for this is in order to ensure that the English documents are of a high standard before they are translated. 
       

    • 5.3 The Underwriting Authority Statement

      The Underwriting Authority Statement must set out fully the levels to which each Underwriter may quote. 
       
      This could be measured by Gross Written Premium, Sum Insured, Number of Lives for Medical or Number of Vehicles for Motor for standard risks, or a combination of these. 
       
      Any discretion to reduce Loadings for a particular quote would normally only lie with the Chief Underwriter or Chief Technical Officer. The scope to which this discretion extends must be fully documented. 
       
      Any additional discretion to reduce Loadings that lies with the Chief Executive Officer must be fully documented. 
       
      The Minimum Loading that must be applied for all quotations must be clearly stated. The Minimum Loading, net of commission, must be no less than 75% of the total loading, net of commission, recommended by the Actuary. 
       
      No discretion to reduce loadings to a particular quotation may be applied until the Underwriting Authority Statement has been approved by the Board of Directors, and it has been submitted to SAMA. 
       

    • 5.4 Training on the Updated Underwriting Manual

      Everyone who has any level of authority to underwrite must be trained in the use of the Underwriting Manual and the Underwriting Tools. 
       
      Records must be maintained of formal training undergone.