JEDDAH, 23 November 2004 — Saudi Arabia’s insurance market will get a big boost in February when the government intends to apply the cooperative health insurance scheme to Saudis working in the private sector as well as to expatriate workers.
The scheme, which was approved in 1999, will be applied to the remaining Saudis within three to five years, Al-Eqtisadiah business daily, a sister publication of Arab News, reported yesterday, quoting informed market sources.
The Kingdom’s health insurance market, estimated at SR8 billion, is expected to pass SR18 billion within the next five years, according to Dr. Abdul Ilah Saati, chairman of the insurance council at the Jeddah Chamber of Commerce and Industry.
The contribution of the insurance sector to the gross domestic product will increase from the present 0.7 percent to 3.7 percent, he said. The Saudi Arabian Monetary Agency reported a 9.8 percent increase in the Kingdom’s medical insurance to SR260.9 million last year. The scheme will be applied to expatriate workers and their families in three phases. In the first phase, companies that employ 500 or more expatriate employees will implement the scheme for their expatriate staff.
In the second phase, the scheme will be applied to expatriate employees in companies employing more than 100 foreigners while in the third stage it will be applied to all companies and all expatriates, including domestic servants.
According to a decision taken by the Council of Ministers, the scheme is to be applied to Saudi employees three years after it has been fully implemented on expatriates. The scheme is being introduced to reduce pressure on government hospitals and cut public spending.
The scheme has not been implemented properly due to lack of rules and regulations and lack of licensed insurance companies. The National Company for Cooperative Insurance (NCCI) is the only authorized insurance firm in the country. Premiums for health insurance are expected to range between SR1,200 and SR1,500 for a year, inclusive of all health services.
According to draft regulations approved by the Cabinet, employers will pay nearly 90 percent of the premium, while employees will contribute only 10 percent or less.
The Cooperative Health Insurance Council, chaired by Health Minister Dr. Hamad Al-Manie, will supervise health insurance services in the country.
It will determine the family members benefiting from the policy as well as the rate of premium to be paid by beneficiaries as well as employers.
It will also decide which companies and health facilities are qualified to provide the service.
The scheme covers medical checkups, medicine, preventive measures such as vaccination, mother and child care, laboratory and X-ray tests, surgical operations and in-patient services.
An employer who fails to pay insurance premiums for his workers will pay fines not in excess of the annual premium and will be barred from recruitment, both temporarily or permanently, the executive bylaw says.
If an insurance company fails to fulfill the terms of the scheme, it will be asked to pay compensation for the damages caused by the violation and a fine of not more than SR5,000 for each individual, the bylaw adds
