The Saudi Arabian Monetary Authority (SAMA) has issued a new set of rules for the licensing and supervision of foreign branches of insurance and reinsurance companies in the country.
SAMA explained that the rules are designed to support the development of the re/insurance industry in Saudi Arabia, while also ensuring the stability and resilience of its financial systems.
The rules clarify application of the provisions of the Cooperative Insurance Control Law and associated Implementing Regulation to the foreign branches.
The initiative also forms part of the country’s Saudi Vision 2030 strategy, which aims to promote a sustainable economy by reducing Saudi Arabia’s dependence on oil and developing public service sectors.
The insurance and reinsurance companies are key components of Saudi Arabia’s financial industry, SAMA noted, and the country’s 2030 strategy is expected to result in more opportunities in these sectors.
Last year, SAMA warned that it was preparing tougher rules for re/insurers as part of a drive to create a smaller number of stronger market players operating in the country.
The Authority said that it would encourage insurers to hold more capital and improve internal risk controls, which it anticipated would drive demand for reinsurance protection.
SAMA is the central bank of the Kingdom of Saudi Arabia and is responsible for managing foreign exchange reserves, promoting price and exchange rate stability, and ensuring the growth and soundness of the country’s financial system.
