JEDDAH, 25 September 2004 — The Shoura Council is considering the cancellation of driving license insurance and its replacement with car insurance, after many insurance companies suffered huge losses estimated at more than SR500 million.
Abdul Ilah Saati, general manager of Meethaq Company, said his company was studying prospects of withdrawing from driving license insurance market as a result of losses, which he estimated at SR52 million last year.
A source at the National Company for Cooperative Insurance said NCCI suffered between 100 and 240 percent losses after paying compensation worth SR500 million to more than 200,000 claimants.
“The Shoura’s plan to discuss alternatives for driving license insurance itself shows that there were discrepancies in implementing the system,” Al-Eqtisadiah quoted Saati as saying. The Kingdom implemented mandatory insurance on driving license on Nov. 20, 2002.
Saati said driving license insurance accounted for 21 percent of his company’s business and hoped the government would replace it with vehicle insurance scheme. Al-Eqtisadiah said it had learned from high-level source that there is a strong move to cancel the present license insurance system.
