• Part 3 Part 3 Insurance and Reinsurance

    • Chapter 1 Chapter 1 Long-Term Insurance

      • Article (69) Separate Accounts for Long-Term Insurance

        Long-term insurance companies shall assign a separate technical and accounting system for each type of long-term insurance, and shall prepare and publish a separate balance sheet for each such type of insurance besides their general balance sheets.

      • Article (70) Profits of Long-Term Insurance

        Long-term insurance companies shall not deduct, directly or indirectly, any part of their funds, set aside to cover liabilities with respect to long term insurance policies, for distribution as profits to shareholders, policyholders or for lending to staff and managers or for the payment of any liabilities other than from issued insurance policies. Distribution of profits shall be limited to the amount of the realized surplus determined by the actuary in its report.

      • Article (71) Prohibition of Discrimination Between Insurance Policies

        Companies providing long-term insurance shall not discriminate between one policy and another of the same type with respect to insurance rates, the schedule structure of the accumulated cash value generated by the policy annually, or the amount of profits distributed to policyholders or for any other considerations unless such discrimination is based on variation in life expectancy.

        As an exception, the above prohibition shall not apply to insurance policies with large cover amounts, which enjoy specific discounts according to rate schedules notified to the Central Bank.

      • Article (72) Examination and Assessment of Long-Term Insurance Business

        (a) Every long-term insurance company shall appoint an actuary to examine and assess the long-term insurance business. A copy of the actuary's report shall be sent to the Central Bank within three months after the end of the financial year. The Report shall be accompanied by a declaration by the company confirming that all particulars and information required for reaching an accurate assessment were made available to the actuary.
        (b) If it appears to the Central Bank that the Actuary's report does not really reflect the financial position of the long-term insurer due to inappropriate assessment procedure, the Governor may appoint another actuary to re-examine the situation at the cost of the company.

      • Article (73) The Actuary's Report

        The Actuary's Report shall, in particular, include the following:

        (1) The company's liabilities regarding long-term insurance business.
        (2) An assessment of any difference between the assets and the liabilities of the long-term insurance.
        (3) A statement of any rights of long-term insurance policyholders in the profits.
        The Central Bank shall issue a regulation regarding other information that the above report shall include.

    • Chapter 2 Chapter 2 General Provisions

      • Article (74) Registration of Insurance Experts, Consultants, Brokers and Representatives

        No actuary, consultant, surveyor, loss adjuster, broker or representative of an insurance company may engage in business in the Kingdom with companies regulated by this law unless they have their names registered on the Register prepared for this purpose by the Central Bank. The terms and conditions for registration in this register shall be issued by the Central Bank.

      • Article (75) Invalid Provisions in Insurance Policies

        Any of the following conditions shall be deemed invalid if incorporated in an insurance policy:

        (1) Any condition that forfeits any of the policyholder's rights due to a violation by the policyholder of any law or regulation. Such invalidation shall not include deliberate offenses committed by policyholders.
        (2) Any condition that does not explicitly state whether it pertains to any of the cases that annul the policyholder's rights.

      • Article (76) Approval of Insurance Policy Forms and Appendices

        (a) No insurance company subject to the provisions of this law shall issue forms of insurance policies or any appendices thereto without the approval of the Central Bank. In order to obtain such approval, applications shall be submitted to the Central Bank accompanied by a copy of the policy or the appendix that it intends to issue.
        (b) The Central Bank shall review the contents of insurances policies and any appendices thereto and shall notify the insurance company, within sixty days from the date of application, of its approval or objection to any contents that may contradict the law or the public order. If the applicant company received no notification during this period, an implicit approval to the contents of the insurance policy or its appendices shall be assumed.
        (c) Insurance policies, appendices and endorsements shall be made in Arabic language and may be accompanied by an English translation. However, in the event of any contradiction between the two texts, the Arabic text shall prevail.

        The Central Bank may exclude certain types of policies from being made in the Arabic language.

      • Article (77) Amendment of Insurance Policy

        The Central Bank may require, at any time, such amendments to the insurance policy, as it deems necessary to safeguard the interests of the policyholders if there is any matter that may cause damages the interests of the policyholders.

      • Article (78) Marketing the Insurance Policies Abroad

        No insurance company registered in the Kingdom shall market its insurance policies abroad without obtaining a prior written approval from the Central Bank.

      • Article (79) Disposal of the Assets of Insurance and Reinsurance Companies

        Insurance or reinsurance companies shall not sell, mortgage or otherwise dispose of more than 5% (five per cent) of the company's assets, according to its latest approved final accounts, for thirty consecutive days, without a written approval from the Central Bank.