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Article Sixty-Nine

No: 596/1
1.Technical provisions must be calculated in accordance with acceptable accounting standards, and approved by an actuary reflecting the company’s obligations, and shall include the following technical provisions as a minimum: 
 
  
a)Unearned Premium Reserves 
 
  
b)Unpaid Claim Reserves 
 
  
c)Claims Expense Reserves. 
 
  
d)Incurred but not reported Claims Reserves. 
 
  
e)Unexpired Risk Reserves. 
 
  
f)Catastrophe Risk Reserves. 
 
  
g)General Expense Reserves. 
 
  
h)Reserves related to protection and savings insurance, such as disability, old age, health, death, medical expenses…etc. 
 
  
2.Reserves shall be calculated, as a minimum, in the following manner: 
 
  
 a.Unearned Premium Reserves shall represent the unearned portion of gross premiums at the time of valuation and shall be calculated according to the following: 
 
 
  1.Last three months for marine transport. 
 
  2.365 days pro rata calculations for all other classes of insurance or 40% of gross premiums. 
 
 b.Unpaid and Expense Claims Reserves shall be determined as a total value of all outstanding claims and related expenses for each class of insurance business. 
 
 
 c.Incurred but not reported Claims Reserves shall be calculated from the total outstanding claims after deducting the reinsurance portion of claims proceeds and according to the following: 
 
 
  1.Fifteen percent (15%) of motor insurance, medical insurance, property insurance, engineering, energy and general accident insurance (excluding liability and personal injuries). 
 
  2.Twenty percent (20%) of liability and other insurance. 
 
  3.Twenty-five percent (25%) of reinsurance accepted from other insurance companies. 
 

In case of non-compliance, SAMA shall be provided with actuarially justified methods to determine these reserves listed in this article.

 d.Doubtful debt reserves shall be calculated as follow: 
 
 
  1.Ten percent (10%) of the total amounts due from reinsurers exceeding 180 days. 
 
  2.Fifteen percent (15%) of the total amounts due from the insured exceeding 90 days. 
 
  3.Twenty-five percent (25%) of the total amounts due from the insured exceeding 180 days. 
 
  4.Seventy-five percent (75%) of the total amounts of uncollected receivables exceeding 360 days. 
 
  5.One hundred percent (100%) of any disputed and uncollected receivables. 
 
3.General reserves specified in view of the company’s experience.