Article 1 of the Saudi Insurance Control Law

This article lays the foundation on which the insurance sector in the Kingdom rests, and includes three elements:

1. The insurance body: insurance in the Kingdom is provided through insurance companies registered in it, so it is not provided through bodies not registered in the Kingdom.
2. The mode of operation: these companies operate on a cooperative insurance basis, along the lines of the provisions in the Articles of Association of the National Company for Cooperative Insurance, issued under Royal Decree No. M/5 dated 17/4/1405 AH.
3. The Sharia control: this is done in a manner that does not conflict with the provisions of Islamic Sharia.

The article does not itself define cooperative insurance, but refers for its model to the Articles of Association of the National Company for Cooperative Insurance, so its characteristics cannot be set out from this text alone.

After this article comes Article 2, which sets the powers of the Saudi Central Bank in this sector, including receiving applications to establish insurance and reinsurance companies and ancillary service providers, issuing licenses, supervision and control, and setting a formula for distributing the surplus of insurance operations between shareholders and policyholders with separate accounts for each. Anyone who needs to know the position of a particular insurance body should consult a lawyer who specializes in insurance and financial sector matters.