JEDDAH, 9 June 2004 — The Saudi Arabian Monetary Agency (SAMA) has created an insurance control department within the agency so as to maintain an equilibrium in its role as monitor and appointer of the sector, according to SAMA Vice Governor Dr. Mohammed Al-Jasser.
Delivering the keynote address at the First Saudi Insurance Forum which began here yesterday, Jasser said Saudi manpower had been trained in the past three years to take charge of the department.
Moreover, the agency had established technical committees in cooperation with the sector to prepare training material, specialized professional insurance certificates and lay down qualifications and licensing criteria for the practitioners in order to establish a standard training policy to accomplish the desired goals.
“There is no doubt that in most countries the insurance sector is regarded as one of the most important pillars of financial services and is considered to be an important savings market. It has indeed been subjected in many countries to the supervision of an independent corporation which supervises all financial sectors,” he explained.
“As a controller of the insurance sector, SAMA aims to create a sophisticated and vital insurance market,” Jasser said, and added, “The agency will work at cementing and deepening of cooperation with insurance companies with the aim of developing the sector both in terms of technique and control, which will go to strengthen the Saudi economy.”
Jasser hoped that the final outcome would result in developing the sector so as to be able to present diversified insurance services to the clients following good professional standards in marketing, the level of disclosures in insurance policies and elucidating the rights and obligations of each party to the insurance process.
He explained that ever since the agency was assigned the responsibility of supervising the insurance sector, it had sought to achieve a high standard of transparency and communication to provide such rules and regulations, forms and instructions pertaining to the industry on the website, periodically updating the rules and regulations.
He urged those concerned with this business, the investors and those working in the industry to cooperate with SAMA in order to build an efficient, strong and competitive insurance sector. Jasser said that the 9/11 events had proved to the world the globalization extent of this sector. “Those events have tremendously affected many of the insurance companies worldwide and some of them are still suffering the consequences to this day,” he added.
In his welcome address Basil Al-Ghalayani, chief executive officer, BMG Financial Advisers, organizer of the event in cooperation with SAMA, said that more than 300 local, regional, and international insurance companies and brokers had registered for the Forum. He underlined that after the initial roadshow that SAMA insurance team had conduced in Riyadh, Jeddah and Beirut, it is realized that there were technical, legal, financial and takaful questions still to be clarified.
“We contacted the insurance industry players including the different insurance committees at Jeddah and Riyadh chambers and after screening the questions filtered them into about 90 and divided the same into different subjects, which will be answered by the SAMA insurance team.”
The first day of the Forum covered such topics as the impact of the regulatory framework on the insurance market, tackled financial issues related to the formation of the insurance companies to be licensed including M&As, valuations, IPOs (Initial Public Offerings), and asset management. The issue of human resources and training was highlighted by NCCI. Also, experts in the area of takaful and health insurance, third party administrators related their respective experiences. Re-insurance business and its prospects in the Saudi market was also covered in one of the sessions.
