The Saudi Cabinet, chaired by Crown Prince Mohammed bin Salman, approved the establishment of a new unified and independent regulator for the insurance sector, the Insurance Authority (IA).
The new entity will commence operations 90 days after the Cabinet resolution. The resolution is not yet announced or published but we anticipate soon.
What are the changes
Prior to this Cabinet decision, the responsibilities in regulating and supervising the insurance sector rested with the Central Bank of Saudi Arabia (SAMA) and the Council of Health Insurance (CHI). Both will continue to function as regulators until the insurance-related competencies are fully transferred to IA by the end of the 90 day transition period.
IA will have the existing insurance mandate vested in SAMA and CHI according to the transition plan and a number of changes are anticipated, including:
1. Unification of regulatory procedures for the insurance sector within IA.
2. Transfer of communication channels related to regulation and compliance in the insurance sector to IA.
According to SAMA’s FAQs for the Establishment of Insurance Authority, the current laws, regulations, rules and instructions issued by SAMA or CHI in the insurance sector will continue to be enforced and remain unchanged, until other overriding instructions are issued. This includes the current complaint handling processes of the Committee for Resolution of Insurance Disputes and Violations. The rights and responsibilities between the insurers, policyholders and beneficiaries will also remain unchanged.
The Cabinet decision reflects the Kingdom’s commitment under Vision 2030 to support the developments of the insurance sector, a key pillar that supports all other economic activities and transformation programs in the Kingdom.
We’ll keep you updated on further details of this change once the Cabinet resolution is published.
How can we help?
Al Tamimi & Company operates a specialist Insurance Practice to cater to all aspects of the Middle East’s insurance industry. We advise on both contentious and non-contentious matters and as a full-service law firm we are able to assist our clients in all industries and sectors on coverage, insurance disputes and risk management issues. For further information, please contact Anand Singh or Di Melody Huang.