The Saudi Cabinet approved on July 14, 2003, a new law regulating the insurance sector in the Kingdom. Scheduled to take effect in three months, the law will open the sector to foreign investors and is one of the prerequisites for Saudi Arabia’s entry into the World Trade Organization (WTO).
Under the new law, insurance companies must be registered and must operate according to the cooperative insurance system. All insurance companies must obtain a license approved by the Cabinet, and when licensed, companies must obtain the approval of the Saudi Arabian Monetary Agency (SAMA) before beginning activities.
The Ministry of Commerce and Industry and SAMA will be responsible for specifying license requirements for companies offering insurance-related services. Analysts predict that the new insurance law will increase the value of the Saudi insurance market from 10 billion Saudi riyals ($2.7 billion) to SR50 billion ($13.3 billion) within five years.
The new insurance law is the latest step in reforming the insurance sector in Saudi Arabia. In September 2002, the Kingdom instituted a program that will require mandatory health insurance for all expatriate employees in the Kingdom by 2005.
By September 2003, all companies with more than 500 expatriate workers will be required to provide medical insurance for staff and their families. In addition, third-party automobile insurance was made compulsory in November 2002. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
