JEDDAH, 30 October — The Council of Ministers yesterday decided to enforce mandatory third-party insurance on all vehicles in the country.
The Cabinet, chaired by Crown Prince Abdullah, deputy premier and commander of the National Guard, authorized the interior minister to execute the new law in stages.
"The Council has decided to impose third-party cooperative insurance on all licensed drivers without exception," Information Minister Dr. Fuad Al-Farsi told the Saudi Press Agency.
He added that the new law will be applied a year after its publication in the official gazette.
The Cabinet also decided not to allow foreign vehicles to enter the Kingdom without having third-party insurance.
The meeting decided to allow licensed cooperative insurance companies in the Kingdom to provide car insurance. However, it insisted that such companies should have the required capabilities and must comply with the Kingdom’s car insurance standards.
The consultative Shoura Council has earlier endorsed the draft law on car insurance, which is applied officially for the first time in the Kingdom.
Al-Farsi said the Interior Ministry would review the application of the new law and its results and present a report to the Cabinet within three years.
Dr. Hamoud Al-Badr, the Shoura’s secretary-general, said 31 members of the 120-member body had taken part in the discussions on car insurance.
The car insurance will cover vehicles, property, death and damages to victims of an accident in which the insured party is involved, a reliable source said.
Several studies have revealed that most drivers involved in accidents are unable to pay damages. These drivers remain in prison until their obligations are met.
There are about six million cars in Saudi Arabia.
The new measure is significant in relation to the number of road accidents in the Kingdom, which has one of the highest rates in the world. Traffic accidents kill at least 3,000 people and injure more than 26,000 annually and result in a loss of more than SR7 billion.
Analysts, however, believe that the absence of comprehensive regulations in the insurance sector might lead to poor performance by the agencies of foreign-registered companies operating in the Kingdom.
Yesterday’s Cabinet meeting also authorized the chief of the Youth Welfare Presidency to hold talks with Malaysian officials to reach an agreement for cooperation in youth and sports affairs.
The Cabinet decided to stop payment of financial rewards or gifts to those who donate blood. The decision was taken on recommendation of the World Health Organization.
The Cabinet appointed Dr. Muhammad ibn Saad Al-Osaimy as secretary-general of the Higher Committee on Education Policy, and Muhammad ibn Saleh Al-Dahham as assistant undersecretary at the Finance and National Economy Ministry, for budgetary and organizational affairs.
The meeting approved the financial reports of the King Fahd Causeway for 1997 and 1998.
