SAMA Decides on Insurance Companies� Capital Increase Applications

SAMA would like to announce that it received applications from 10 insurance companies for raising their capital.  It set a list of requirements that should be fulfilled by the insurance companies willing to raise their capital before making a decision on their applications. The requirements included submission of a detailed and comprehensive work plan for the next five years. After that, an invitation was sent to the companies' directors and a meeting was held with them to clarify the requirements and answer their queries. Then, SAMA proceeded to consider and analyze thoroughly the work plans submitted by the companies. Once the work team has completed the review of the work plans, SAMA called officials of each company, including boards' representatives, to discuss with them the results and comments made regarding the companies' work plans after an adequate study thereof. Based on the thorough review of the study's findings, SAMA decided the following:

1.     Final approval of two applications for raising capital;

2.     Initial approval of five applications, conditional on meeting specific requirements; and

3.     Rejection of three applications due to failure to fulfill basic requirements to obtain a final or initial approval.

However, companies that were denied approval for raising their capital may reapply after fulfillment of the requirements specified. SAMA would like to emphasize that the measures taken in this matter aim, in the first place, at the protection of policyholders and shareholders and promotion of stability in the Saudi insurance sector.

SAMA would also like to state that its approval of insurance companies' applications for raising their capital is not an endorsement of investment in the offerings or shares of such companies. Rather, it only means that the necessary requirements have been met to obtain SAMA's approval, and the implementation of the work plans is the responsibility of the boards of directors and senior managements of these companies. SAMA calls on shareholders in these companies to study and analyze the rights issue prospectuses issued by them and approved by CMA in order to make the appropriate decision on subscription.