Reference is made to SAMA's announcement dated 15/08/1439H on SAMA's decision to issue a final warning to the Saudi Indian Company for Cooperative Insurance (Wafa Insurance) for failing to comply with the requirements of the solvency margin. SAMA has required Wafa Insurance to maintain the required solvency margin by 30/09/2018 and appoint an independent consultant at the expense of Wafa Insurance and approved by SAMA to provide advice in this regard. SAMA has warned Wafa Insurance that if no effective measures were taken to amend the solvency margin in accordance with the requirements of the Implementing Regulations for Cooperative Insurance Companies Control Law or if the solvency margin of the company sharply declined, SAMA would take one or more of the legal actions stipulated in the Cooperative Insurance Companies Control Law and its Implementing Regulations to protect the rights of insurance policyholders and beneficiaries, including suspending the company from accepting, or limiting its acceptance of, new subscribers to or investors in any of its insurance activities. Reference is made to the company's announcement published on the website of the Saudi Stock Exchange (Tadawul) dated 21/08/1439H on the accumulated losses exceeding 50% of the company's capital. Reference is also made to the company's announcement published on the website of the Saudi Stock Exchange (Tadawul) dated 29/08/1439H on obtaining SAMA's approval to reduce its capital. Thus, the company's capital has reached the minimum solvency ratio required to carry out insurance activities as stipulated in Article (3) of the Cooperative Insurance Companies Control Law, and the accumulated losses have exceeded 48% of the company's capital after reduction.
SAMA would like to inform the public that it has previously addressed Wafa Insurance with several letters over the past years regarding the low actual solvency margin and the importance of complying with the necessary solvency requirements. It also held a meeting with the Chairman of the Board of Directors and the CEO of Wafa Insurance at SAMA head office on 03/08/1439H to ensure that the company understands the critical financial situation it is going through and to require the Board of Directors to assume its legal responsibilities and take urgent and effective decisions to enable the company to meet the solvency requirements for the benefit of insurance policyholders and beneficiaries.
SAMA would also like to inform the public that it has received the financial supervision reports of the Saudi Indian Company for Cooperative Insurance (Wafa Insurance) for the first quarter of the fiscal year 2018. After reviewing these reports, SAMA has found that the company did not comply with the necessary solvency margin requirements and had an extremely low solvency ratio. In addition, Wafa Insurance did not provide SAMA with evidence that it had taken the necessary measures to amend the solvency margin to meet legal requirements, nor that it was in the process of taking such measures.
Therefore, as part of SAMA's responsibilities to protect the rights of insurance policyholders and beneficiaries, due to Wafa Insurance's failure to meet the solvency margin requirements and in accordance with Article (19) of the Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 02/06/1424H and Article (68) of the Implementing Regulations for Cooperative Insurance Companies Control Law issued by Ministerial Resolution No. (1/596) dated 01/03/1425H, SAMA would like to announce that it has decided to suspend the Saudi Indian Company for Cooperative Insurance (Wafa Insurance) from issuing or renewing any insurance policies as of Thursday 09/09/1439H (24/05/2018).
SAMA asserts that the suspension decision does not relieve the company or its officials of their obligations under the insurance policies in effect or claims arising therefrom. SAMA also confirms that the suspension will not be lifted until the company takes effective measures to amend the solvency margin in accordance with the requirements of the Implementing Regulations for Cooperative Insurance Companies Control Law.
SAMA calls upon all insurance policyholders and beneficiaries to not compromise their rights and to contact their company in this regard. If the company refuses to cooperate, policyholders and beneficiaries should not hesitate to file a complaint with the Consumer Protection Department through SAMAcares.sa or to call 8001256666.