JEDDAH, 21 February 2006 — The Council of Ministers is likely to license 22 insurance companies within a few weeks as the Saudi Arabian Monetary Agency (SAMA) has already finished studies on these companies and presented their files to the Ministry of Commerce and Industry to complete licensing procedures.
“We have completed studies on 22 of 30 companies, which intend to enter the Kingdom’s insurance market,” Muhammad Al-Jasser, deputy governor of SAMA, told an insurance conference here on Sunday.
He confirmed that the ministry had transferred the files of companies to the Cabinet for approval.
“The coming weeks will see the official entry of these companies into the market after the Cabinet endorsement,” Al-Jasser said, adding that the joint stock firms would float 30 percent of their shares for public subscription.
Al-Jasser said his organization would not reduce the minimum capital requirement of SR100 million on insurance firms. “The Saudi market is big and it requires insurance companies that are financially sound and strong and can fulfill its promises,” he pointed out.
He said it was the government, which appointed SAMA as the regulator of insurance companies in the Kingdom.
“SAMA will hand over this job to an independent authority after doing its duty in organizing the market,” he added. There were calls by experts to transfer supervision of the market to a specialized body.
The SAMA website has named some of the companies whose files have been sent to the ministry. They are: Assurance Saudi Franci, Saudi United Cooperative Insurance (AMITY), Saudi-Indian Insurance Company, United Cooperative Assurance Company (UCA), BUPA Arabia, Al-Ahli Takaful Company, Saudi National Insurance Company, SABB Takaful, Arabian Shield Insurance Co., Al-Rajhi Company for Cooperative Insurance, Al-Alamiya Insurance Co., the Mediterranean & Gulf Insurance & Reinsurance Co. (MedGulf), AXA Cooperative Insurance and Tokio Marine & Nichido.
Saudi Arabia made health insurance mandatory from January 2006. In the first phase, the cooperative health insurance scheme would be implemented on expatriate workers in companies having 500 or more employees. Insurance companies have already started issuing health cards to four groups of clients.
