Saudi regulator warns 14 insurance firms that licences could be withdrawn

SAMA says that firms have not complied with the necessary regulatory requirements for the insurance sector

  
A Saudi money changer counts U.S banknotes at a currency exchange shop in Riyadh, Saudi Arabia September 29, 2016. Image used for illustrative purpose.

A Saudi money changer counts U.S banknotes at a currency exchange shop in Riyadh, Saudi Arabia September 29, 2016. Image used for illustrative purpose.

REUTERS/Faisal Al Nasser

Saudi Arabian Monetary Authority (SAMA) has warned several insurance firms in the kingdom that their licences could be withdrawn due to non-compliance with regulations stipulated for firms operating in the sector, a statement on SAMA’s website said.

The statement named 14 insurance firms that it said have not complied with all the regulatory requirements and instructions related to insurance activity. The statement did not indicate the reasons for non-compliance, and SAMA did not respond to a request from Zawya for further details.

The firms listed are: Al Tayyar Insurance Broker, Mayar Insurance House, AlBarak Lil Fahs Wal Moayana, Dar Attameen Insurance Agency, Shadow Company Insurance Agency, Majal Alwefaq for Insurance Agency, AlHolool AlSahla Insurance Agency, Wasilah Insurance Agency, United Emtithal for Cooperative insurance agency, The Ocean Modern Insurance Agency, Professional Group Insurance Agency, Etemad Insurance Agency, Madad Al-Aman Insurance Agency, Al Tawun Al Oula Insurance Agency.

SAMA said that these companies need to expedite a review of their practices to correct their situation within a period not exceeding 20 business days from the date its statement was issued (June 26). If they fail to do so, the regulator will initiate procedures to request the withdrawal of their licenses.

The regulator also called on beneficiaries of insurance coverage by any of these firms to submit any complaints to the Department of Customer Protection through SAMA’s website.

Saudi insurance stocks surged earlier this week as a ban on women from driving was lifted on June 24, and investors expect that the sector will see significant gains following this move, with rising hopes that insurance volumes will rise.

Insurance stocks in Saudi have been one of the worst performing sectors on the Saudi stock market for the year to date, but they outperformed other sectors this Sunday.

A report by credit rating agency S&P Global on Saudi Arabia’s insurance sector in April showed that combined profits of firms in the sector dropped by 55 percent in 2017, to about 1.1 billion Saudi riyals, from 2.5 billion riyals in 2016.

(Reporting by Nada Al Rifai; Editing by Michael Fahy)

(nada.rifai@thomsonreuters.com)

© ZAWYA 2018

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