Featured Product

    SAMA Publishes Guidelines and Rules for Banks and Insurers

    March 01, 2020

    SAMA published additional licensing guidelines and criteria for digital-only banks in Saudi Arabia. These guidelines are applicable to digital-only bank license applications in Saudi Arabia. The guidelines must be considered as additional requirements to be met, along with the Banking Licensing Guidelines and Minimum Criteria published earlier by SAMA. The additional requirements are related to licensing conditions, capital and liquidity requirements, governance, technology and cybersecurity risks, independent assessment, outsourcing, exit plan, prudential and supervisory requirements, and consumer protection. SAMA has also published actuarial work rules for insurance and rules governing insurance aggregation activities.

    Digital-only banks will be subject to the same set of prudential requirements as other banks. Digital-only banks are required to satisfy SAMA that their proposed risk management and control policies are adequate and appropriate for monitoring and limiting risk exposures as per section D of the SAMA Banking Licensing Guidelines and Minimum Criteria. Digital-only banks are required to follow the same principles of corporate governance for banks operating in Saudi Arabia as conventional banks. To apply for a digital-only bank license in Saudi Arabia, the following conditions must be met:

    • The digital-only bank should be set up as a locally incorporated joint-stock company.
    • A promoter should have experience and knowledge in the financial industry; appropriate technology-related experience; and financial capacity to support setting up the digital-only bank.
    • An applicant must possess a team with adequate expertise to discuss relevant aspects of the application.

    Along with the application, an applicant is required to present a clearly articulated business plan, covering as a minimum the IT infrastructure plan and innovative technologies that will be rolled out, the financial projections, the targeted segment, and the proposed products and services in line with the targeted segments. An applicant is also required to submit an Internal Capital Adequacy Assessment Plan (ICAAP) and an Internal Liquidity Adequacy Assessment Plan (ILAAP). SAMA will assess the adequacy of capital of applicants on a case-by-case basis considering the scale, nature, and complexity of the operations, as proposed in the Business Plan, ICAAP, and ILAAP of the applicants. SAMA may require the applicant to appoint a qualified and experienced third-party entity (assessor) to perform assessments on the specific technical areas such as the technology/cybersecurity arrangements at the expense of the applicant. 

    The actuarial work rules apply to insurance and reinsurance companies, their Boards of Directors and senior management, appointed actuaries or those who are entrusted to carry out the work on their behalf, Heads and staff of actuarial function, and actuarial services providers. The objectives of the rules are to regulate minimum standards of actuarial practice; for the role and responsibilities of appointed actuaries, along with the procedures for their appointment, for the actuarial function of insurance and/or reinsurance companies and for the authorization of actuarial services providers. The rules also aim to regulate responsibilities of the Board of Directors, senior management, and company regarding the appointed actuary and actuarial function. The rules governing insurance aggregation activities set out the requirements and controls necessary for granting the license to carry out online insurance aggregation activities in Saudi Arabia, in addition to the rules concerning the relationship between the insurance aggregator and insurance companies.


    Related Links 

    Keywords: Middle East and Africa, Saudi Arabia, Banking, Insurance, Licensing, Digital Banks, ICAAP, ILAAP, Cybersecurity, Governance, Capital Adequacy, Actuarial Function, SAMA

    Featured Experts
    Related Articles
    News

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423