SAMA Issues Rules for Licensing and Supervision of Foreign Insurers
SAMA published rules for licensing and supervision of branches of foreign insurance and/or reinsurance companies in Saudi Arabia. The rules describe the licensing requirements of SAMA, the prescribed application procedures, the processing fees, and the regulations expected to be followed by the applicants.
The rules state that SAMA requires the Branch to submit regular reporting forms in a similar format to those required for local insurance and/or reinsurance companies. SAMA requires the Company to submit regular returns to demonstrate its solvency determined according to Saudi Arabian regulatory requirements. In addition, SAMA requires the Company to inform it about any decisions that affect the Branch business, including, but not limited to, decisions related to the capital, solvency, and the board of directors. SAMA reserves the right to set out further requirements at its sole discretion. The Company shall evaluate and ensure the adequacy of the technical provisions of the Branch on a quarterly basis. The Company shall remain ultimately liable for settling all policyholder obligations and other liabilities of the Branch. If required, SAMA may also deploy the Branch’s Deposit stated in Article (14) of these Rules to settle the policyholder obligations.
Furthermore, SAMA rules specify that the statutory Deposit percentage for a Company shall be determined based on the credit ratings by allowed ratings classifications such as by S&P, AM Best, Moody's, or Fitch. If a ratings downgrade occurs, the Company shall inform SAMA and deposit the balance of the Deposit corresponding to the lower credit rating within ninety (90) days of such downgrade. If the rating of the Company is upgraded, the Company may apply to SAMA to reduce the Deposit to an amount corresponding to such upgraded rating with the change taking effect one year from the rating upgrade.
Related Link: Rules for Licensing and Supervision (PDF)
Keywords: Middle East and Africa, Saudi Arabia, Insurance, Foreign Insurers, Licensing Applications, Reporting, CRA, SAMA
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