Article 16 of the Saudi Insurance Control Law

This article deals with a type of reserve other than the statutory reserve. It requires every insurance and reinsurance company to build:

• The reserves needed for each branch of insurance the company practices, so each branch has its own reserves.
• Other reserves.

All of this is as provided by the Implementing Regulations. The article does not specify the types of these reserves, their amounts or how they are calculated; it refers all of that to the regulations, and nothing more can be spelled out from this text.

The difference between this article and Article 15 is clear: Article 15 requires allocating at least 20% of annual profits to a statutory reserve until it reaches 100% of paid-up capital, a reserve tied to profits and capital. This article concerns reserves tied to the insurance branches the company itself practices.

It is followed by Article 17, which requires the company to keep a separate account for each branch of insurance, and records in which it enters the policies it issues; treating each branch separately shows in both the reserves and the accounts. Anyone who needs the details of these reserves should consult the Implementing Regulations or a lawyer specialized in insurance and financial-sector matters.