RIYADH, 9 May 2006 — Minister of Commerce & Industry Dr. Hashim Yamani said that the licensing procedures for foreign insurance companies, short-listed earlier by the Saudi Arabian Monetary Agency (SAMA), were in the final stages. These companies, whose papers are being reviewed by the Supreme Economic Commission and by the Council of Ministers, will be made operational in the Kingdom “very soon,” said Yamani.
“The papers of these insurance companies were sent to the Council of Ministers for approval and many companies have already passed through the process,” said the minister. Currently, the Supreme Economic Commission is also looking at the status, ownership structure and records of these companies. Some of the insurance companies have expressed their concerns over the delay in granting operating licenses. These companies including some joint-venture insurers have invested substantial money into the sector and have already acquired offices and hired personnel in the Kingdom. They are worried about how long they will be required to keep their shutters down.
It was more than a year ago when SAMA, the regulatory body for insurance sector, posted the list of short-listed insurance companies, which qualified for licenses. The SAMA announced the names of 14 insurance companies at that time.
As per WTO requirements, the Kingdom is committed to allowing foreign insurance companies to operate in the Kingdom.
“The form of the insurance companies have also been specified and the process is also very much structured,” said Yamani, adding that the SAMA has prepared the framework and already reviewed the companies’ structures and the eligibility criteria. SAMA received a large number of applications from companies wanting to be licensed, but the condition set by SAMA that insurance companies should have a market capitalization of at least SR100 million hampered the plans of some companies.
