Today, Thursday, 25/11/1438 AH, the Saudi Arabian Monetary Authority (SAMA) issued a decision to reduce the commission of compulsory vehicle insurance. This decision comes in conjunction with SAMA's approval of the electronic brokerage service.  Based on the responsibility entrusted to the institution to work on developing the insurance sector and encouraging insurance products with added value Which meets the needs of all segments of society, and supports fair competition aimed at providing the best insurance services to citizens and residents at competitive prices, and to encourage professional practices that enhance transparency and disclosure of insurance industry.  In line with the Kingdom's 2030 vision that encourages small and medium enterprises, and in order to consolidate the stability of the insurance market Which supports the growth of the national economy.

The decision states the following:

First: The maximum percentage of the commission allowed in the compulsory vehicle insurance for brokerage firms that obtained the approval of the institution to practice the electronic service shall be 2% of the insurance subscription as of the date of this decision.

Second: The maximum percentage of commission allowed for insurance companies to provide to any broker or insurance agent is amended to become 2% of the insurance contribution in compulsory vehicle insurance, and this amendment shall be effective as of the date of this decision.

As a n exceptional case, all foregoing of brokerage companies and insurance agencies that were actually practicing the activity before the issuance of this decision, as well as employees and sales representatives of insurance companies. The maximum percentage of commission allowed for insurance companies to offer to the categories referred to in this paragraph shall be gradually reduced and this shall be as follows:

6% as of 01/01/2018.

4% as of 07/01/2018.

2% as of 01/01/2019.