In force Last amended 23/1/1443 AH
Saudi Insurance Control Law
نظام مراقبة شركات التأمين التعاوني
Regulates insurance in Saudi Arabia, which must be provided by licensed companies operating on a cooperative basis, under the supervision of the Saudi Central Bank. It covers licensing, governance, solvency, inspection, penalties and insurance dispute committees.
- Articles
- 25
- In force
- 25
- Amended
- 8
- Issued
- 2/6/1424 AH
Issued by: مرسوم ملكي رقم م/32 بتاريخ 2 / 6 / 1424 · قرار مجلس الوزراء رقم 125 بتاريخ 14 / 5 / 1424
Each article shows the official Arabic text, which is the only legally binding version, followed by our plain-English explanation.
Browse Insurance Control Law by topic
Cooperative Insurance and the Scope of the Law5 articlesThe Central Bank's Insurance Powers1 articleLicensing and Establishing Insurance Companies2 articlesInsurance Ancillary Services4 articlesGovernance of Insurance Companies and Management Liability3 articlesSolvency and Reserves3 articlesAccounts and Records of Insurance Companies4 articlesSupervising and Inspecting Insurance Companies4 articlesInsurance Measures and Penalties2 articlesInsurance Dispute Committees2 articles
Articles of the Saudi Insurance Control Law
- Article 1The article limits insurance in the Kingdom to insurance companies registered there that operate on a cooperative insurance basis in a manner that does not conflict with the provisions of Islamic Sharia.
- Article 2The article sets the powers of the Saudi Central Bank in the insurance sector, from reviewing establishment applications and issuing licenses to supervision, regulating investment, distributing surplus and protecting beneficiaries.Amended M/12
- Article 3The article prohibits carrying on insurance or ancillary services without a Central Bank license, requires an insurance company to be a joint stock company, and regulates public offering, capital and ownership of brokerage.Amended M/12
- Article 4The article makes the Implementing Regulations determine the insurance operations subject to the Law, and makes each insurance company specify the types of insurance it will carry on.
- Article 5The article prevents insurance and reinsurance companies, after beginning their business, from ceasing insurance business before the approval of the Saudi Arabian Monetary Agency.
- Article 6The article requires the approval of the Saudi Central Bank for nominating members of the boards, committees, managers and senior position holders of insurance, reinsurance and ancillary services companies.Amended M/12
- Article 7The article makes the chairman of the board, the managing director, the board members and the general manager of an insurance or reinsurance company each responsible, within his competence, for the company's violations.
- Article 8The article gives the Saudi Arabian Monetary Agency the right to inspect the records and accounts of insurance and reinsurance companies at their premises, and requires their employees to provide documents and information.
- Article 9The article prevents insurance and reinsurance companies from opening branches, merging, or acquiring an insurance or banking business or the shares of another insurance company except with written approval.
- Article 10The article requires an insurance company's general assembly to appoint two audit firms each year, sets the content of their report, and requires publishing the financial statements and the report within 3 months of the end of the financial year.
- Article 11The article allows the Saudi Arabian Monetary Agency to ask insurance companies at any time for any necessary data, and requires them to send specific data on revenues, business and investments on request.
- Article 12The article prohibits anyone who obtains information during or on the occasion of work related to applying the Cooperative Insurance Companies Control Law from disclosing it or benefiting from it in any way.
- Article 13The article requires insurance and reinsurance companies to file their zakat or tax returns, audited financial statements and any requested data with the Zakat and Income Authority, and to pay what is due on time.
- Article 14The article requires insurance and reinsurance companies to place a statutory deposit with a local bank to the order of the Saudi Arabian Monetary Agency, with controls set by the Implementing Regulations.
- Article 15The article requires insurance and reinsurance companies to allocate at least 20% of annual profits to a statutory reserve until the reserve reaches 100% of paid-up capital.
- Article 16The article requires insurance and reinsurance companies to build the reserves needed for each branch of insurance they practice, and other reserves, as set by the Implementing Regulations.
- Article 17The article requires insurance companies to keep a separate account for each branch and records of their policies, holders' details and amendments, and lets the regulator require additional data.
- Article 18The article assigns inspection, supervision and enforcement of violations to Central Bank employees named by the Governor, and lets the Governor outsource supporting technical work to the private sector.Amended M/12
- Article 19The article lets the Central Bank penalize violating insurance and reinsurance companies and ancillary service providers with a fine or license cancellation, take supervisory measures such as warnings and suspension, and publish them.Amended M/12
- Article 20The article creates a Primary Committee, by Council of Ministers decision, to decide insurance contract disputes and sector disputes and hear grievances against Central Bank penalties and license cancellations.Amended M/12
- Article 21The article punishes carrying on insurance or ancillary services without a license with a fine up to SAR 2 million and up to 4 years in prison, and any other violation with a fine up to SAR 2 million plus a daily fine for continuing.Amended M/12
- Article 22The article creates an Appeal Committee to hear grievances against Primary Committee decisions in insurance disputes, with final decisions, and regulates member appointment, rules of work and remuneration.Amended
- Article 23The article provides that the Implementing Regulations are issued by decision of the Minister of Finance, published within 60 days of the law's publication, and take effect when the law does.
- Article 24The article provides that the Companies Law applies to everything not covered by a special provision in the Cooperative Insurance Companies Control Law, to the extent consistent with insurance companies' nature and subject to Article 1.
- Article 25The article provides that the Cooperative Insurance Companies Control Law is published in the Official Gazette and takes effect 90 days after its publication date.