Dear Mr.
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SAMA issued the original Underwriting Circular on 25/5/1435.
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At the request of the Insurance Executive Committee (IEC) SAMA subsequently issued standard claims experience forms for medical and motor insurance on 1 December 2014 to come into effect on 1 January 2015. These forms included clarifications, corrections and updates to the original Underwriting Circular.
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The Underwriting Practices 2015 update was issued on 24/6/2015.
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SAMA issued Property Instructions on 20/10/2015.
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SAMA has noted that underwriting and other practices in the medical and motor classes are now diverging as the market develops. In future SAMA will issue Circulars and Instructions separately by Class of Insurance as defined in Article 33 of the Implementing Regulations.
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This Circular refers to health insurance only.
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An updated version of the claims experience forms for medical expenses was issued on 9 June 2016, with an implementation date of 1 September 2016.
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SAMA has noted that underwriting practices in the market remain out of line with international practice in some respects that are damaging the functioning of the market. These practices include:
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| | • | Limited rating factors being used to price individual medical risks, with such risks being treated as commodity products.
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SAMA introduced requirements for insurance companies to obtain and submit actuarial pricing reports for medical expenses businesses late in 2012 and to be implemented starting from 1 January 2013 for medical expenses insurance business.
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These actuarial pricing reports were required to be updated by June 2014. and then by August 2015.
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The submitted actuarial medical pricing reports must be updated to fully take into account the recent claims experience of insurance companies.
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The technical instructions for actuarial pricing reports have now been included within SAMA’s Actuarial Work Regulations, and these Regulations should be read in conjunction with this Circular.
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This Circular details SAMA's instructions with respect to the above mentioned issues.
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No insurance company shall ever provide a quotation without having adequate underwriting information, including claims experience, on which to scientifically determine the premium rates appropriate for the policy terms & conditions offered. It should be noted that this applies to all insurance policies of all classes.
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