The Saudi Government’s Role In Regulating Insurance Activities

Editorial

The Saudi Government’s Role In Regulating Insurance Activities

 

The Saudi government has improved its involvement in insurance activities by strictly exercising control over insurance companies,[1] and by increasing its supervision and control over the specialized public and private institutions operating in the Kingdom.

 

Public institutions and authorities have increased their role in controlling and supervising Saudi insurance activities by codifying regulations governing  insurance companies and insurance professionals. These institutions and authorities play a significant supervisory role in the field of insurance activities orientation.

 

This role is imposed due to the sophisticated technical nature characterizing  insurance activities, thus necessitating governmental oversight over  insurance companies to ensure compliance.[2]

Supervision and control over insurance activities occurs through an Insurance Supervisor which is a governmental authority or pubic organization exercising supervision and control over the insurance sector in the country of subscription. [3]

It is worthwhile to point out a significant legal aspect for the control and supervision over insurance activities as codified under Saudi law. An insurance or re-insurance company, upon commencing business, may not suspend its insurance activities without the prior approval of the Saudi Arabian Monetary Agency. This is to ensure that insurance companies take all necessary measures to safeguard the rights of policyholders and its investors.[4]

 

[1] Abd El-Razzak  El-Sanhori ALWASSET in civil law explanation, Part 7, Volume2, Ihya Alturath Al-Arabi  Home, Beirut, Lebanon, 1964,  page 1097

[2] Abd El-Razzak  El-Sanhori, the same reference,  page 1098

[3] Article (6/1) Implementing Regulations to Co-operative Insurance Companies  Law , 1425H

[4]  Article (75) Co-operative Insurance Companies  Law, 1424H