Aligned with the ambitious goals of Vision 2030, the Kingdom of Saudi Arabia has implemented a series of far-reaching reforms to reduce its dependence on oil and diversify its economy.
As part of the Vision 2030 plan, one of the key objectives is to develop the insurance sector in the Kingdom of Saudi Arabia.
In August 2023, the Council of Ministers approved the establishment of the IA, which is a significant step forward in building a robust, stable, and vital insurance sector in the country.
The IA will ensure growth and development by unifying the regulators, SAMA and CHI, and enhancing the mandated supervision of the insurance sector in KSA.
The main objective of this new reform is to regulate and develop the insurance sector in the Kingdom while ensuring the protection of the rights of policyholders and beneficiaries.
Majors changes
The Insurance Authority (IA) will be responsible for developing the strategy for the insurance sector.
They will review and reshape the existing laws, regulations, and instructions related to the sector.
IA will also set licensing requirements for insurance businesses, issue licenses, and establish rules for conducting insurance activities.
Moreover, IA will organize training programs, seminars, and conferences and provide training to specialists in the insurance sector. They will also prepare reviews and statistics on the insurance sector to ensure its smooth functioning.
Future potential
The establishment of the Insurance Authority has the key objective of supporting the growth of the private sector by developing the insurance sector to manage financial risks effectively.
The IA will implement higher international standards to promote growth and development and prioritize improving companies’ capacity to accept risks.
Regulation of the insurance sector will create an appealing investment environment to attract foreign investments.
Findings
Establishing the Insurance Authority is a crucial reform in the insurance sector. With other reforms, doing business in Saudi Arabia will become more accessible and convenient, attracting foreign investments in the insurance and other sectors.
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