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samaSaudi Arabian Monetary AuthorityNewsSAMA prohibits combining the practice of insurance brokerage and reinsurance brokerage activities in one company
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SAMA prohibits combining the practice of insurance brokerage and reinsurance brokerage activities in one company
02/01/2020 12:00 AM

       The Saudi Arabian Monetary Authority (SAMA) announces the issuance of its decision to prohibit the combination of the practice of insurance brokerage activities and reinsurance brokerage activities in one company, as of 07/05/1441AH.

 

       SAMA clarified that the decision came out of its responsibility to develop and consolidate the stability of the insurance sector and increase its contribution to the growth of the national economy and diversification of its sources. This comes in an effort to develop a business environment in support of insurance services, especially brokerage firms, and to enhance the professional relationship in the communication processes between them and insurance and reinsurance companies.

       SAMA said that it aims through this step to reduce wrong practices in contractual relations for reinsurance business, which reflects positively on raising retention rates for local insurance companies. It also aims to support the development of competencies and national human cadres in the insurance sector across the Kingdom and to give them the opportunity and qualification to work in multiple insurance areas, confirming in this regard the enforcement of the prohibition of combining the practice of insurance and reinsurance in one company from its date. Companies combined the practice of the two activities were given a period of one year to commit to the implementing of the new decision. To that end, they must provide SAMA with their commitment plan within three months from the date of the decision.

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