Press Release by SAMA
Reference is made to what has been reported in some mass media and social networks regarding the issuance of a directive by SAMA instructing insurance companies to raise vehicle and health insurance premiums. In view that what has been circulated is groundless and does not reflect the reality of SAMA�s directives, we would like to state that SAMA has no more than emphasized that insurance companies are required to comply with regulatory provisions, particularly those set forth under Article (46) of the Implementing Regulations of the Cooperative Insurance Companies Control Law issued under Decree No. (M/32) dated 2/6/1424H, providing that �The Company shall adhere to principles set forth in this article when pricing insurance policies:
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Pricing shall be fair, reasonable and adequate;
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Pricing shall be set in accordance with the Company�s underwriting guidelines with adequacy and appropriateness to the risks undertaken by the Company, and in accordance with appropriate technical reserves.
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Providing the Agency with justifications and basis used in setting prices. These prices shall not rely upon other Company�s pricing�.
Aiming at verifying the compliance of all insurance companies with the Article referred to above, SAMA obliged all insurance companies to apply price premiums determined by the actuary and revised Underwriting Guide for all medical insurance products effective from 1/1/2013, and all motor insurance products effective from 1/4/2013 so that their product pricing shall be based on technical bases and actuarial studies, which change from time to time due to rising changes to the underlying determinants of prices.
The foregoing would give SAMA assurance on the mechanism adopted by insurance companies for pricing their products fairly, reasonably, and in accordance with underwriting rules, the effects of which will be positively reflected on the services provided by insurance companies to their customers.
Ali Solaiman Al-Ayed
Director General of Insurance Company Control Department