JEDDAH, 23 June — Insurance operators have started drawing up plans in expectation of the implementation of Saudi Arabia’s new health insurance scheme for up to five million foreign workers.

"Its implementation will open up job opportunities, especially for Saudis," a leading operator said yesterday.

Welcoming the approval given to the long-awaited health insurance regulations, Thomas Renn, MedNet Gulf E.C.’s general manager for the Kingdom, told Arab News: "At the moment we’re waiting for legislation on health insurance. This is an important sector that should be regulated. One encouraging factor is that there have been reports about the upcoming legislation covering not only health insurance but also general insurance."

According to Renn, the Kingdom has allowed Methaq insurance company to operate in addition to the National Company for Cooperative Insurance (NCCI) in the government sector. "With the upcoming legislation, there will be need for more organized companies to take the center stage," he said.

Dr. Muhammad Hassan Mufti, chief executive officer at Security Forces Hospital and a health administration consultant, said there was an urgent need for reining in the ballooning cost of health care to make it easily accessible to the people. This will be one of the areas of concern of the newly constituted Cooperative Health Insurance Council (CHIC).

Dr. Mufti, who is the author of "Healthcare Development Strategies in the Kingdom of Saudi Arabia," suggests that the scheme could begin with large companies having a substantial workforce in the three major cities — Riyadh, Jeddah and Dammam.

"The next phase could cover smaller companies in a descending order," Dr. Mufti said.

Asked about the size of the health insurance market, MedNet’s Renn said: "If you look at the competitiveness of health insurance, you’ve around 70 to 80 companies vying for a market of 800,000 insurance members at the moment."

"We consider 10 of these companies as professional and serious players. Some of them are fly-by-night operators. They just come here, make quick money and disappear. They don’t offer professional products or services. With the regulation of the market, public interests will be protected as they will not buy insurance cover from companies that disappear after two or three months.

"Many have suffered due to non-recovery of claims from such operators," he said.

Renn was confident that the new legislation would clean up the market because "quite rightly companies will have to ensure a minimum share capital in order to protect insured members."

He said only strong professional companies will be able to afford the share capital that may run into millions of riyals. "That will also reduce the number of operators. Maybe, some general insurance companies will consider merging with their health insurance counterparts in the process."

After all, the volume of insurance market ranges from SR5 billion to SR7 billion and companies will have to ensure that their profits are reinvested for the benefit of insured members."

The annual turnover of the medical insurance market stood at SR807.4 million in 1999.

— Additional reporting by Javid Hassan