The words and phrases contained in these rules shall have the meanings set forth in the Implementing Regulation of the Cooperative Insurance Companies Control Law and the Electronic Insurance Operations Regulation.

For the purpose of applying the provisions of these rules; the following words and phrases—wherever they appear in these rules—shall have the meanings indicated next to each, unless the context requires otherwise:

• 1.1 The Bank: The Saudi Central Bank (SAMA).
• 1.2 The Law: The Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 02/06/1424H (corresponding to 31/07/2003) and amended by Royal Decree No. (M/30) dated 27/05/1434H (corresponding to 08/04/2013).
• 1.3 The Rules: The rules regulating electronic insurance brokerage activities.
• 1.4 Insurance Company: The company licensed to practice insurance activities in accordance with the provisions of the Cooperative Insurance Companies Control Law.
• 1.5 Electronic Insurance Broker: The company licensed/approved by the Saudi Central Bank to practice electronic insurance brokerage activities.
• 1.6 Electronic Insurance Brokerage Activities: The practice of insurance brokerage activities through electronic means to complete the purchase of insurance policies on behalf of the insured, including comparing prices and coverages offered by insurance companies, facilitating, and completing the sale and purchase of policies.
• 1.7 Electronic Platform: Any electronic means used to practice electronic insurance brokerage activities, including, for example, a website or an electronic application.

These Rules shall apply to Insurance Aggregation Activities.

The Rules set out the requirements and controls necessary for granting the license to carry out online Insurance Aggregation Activities in Saudi Arabia, in addition to the rules concerning the relationship between the Insurance Aggregator and Insurance Companies.

1. Without prejudice to the provisions of the Cooperative Insurance Companies Control Law, the application for a license to practice electronic insurance brokerage activities shall be submitted to the Central Bank in accordance with the requirements, regulations, and procedures set forth in these rules, in addition to what the Central Bank determines in this regard from time to time.

2. The provisions of the Cooperative Insurance Companies Control Law, its executive regulations, the Regulatory Regulation for Insurance Brokers and Agents, the Electronic Insurance Operations Regulation, the rules and instructions of the Central Bank, and other relevant systems issued by the competent authorities shall apply to all matters not specifically addressed in these rules, to the extent applicable.

1. The applicant for practicing electronic insurance brokerage must meet the following conditions:

• A) It must be practiced by a joint-stock company or a limited liability company licensed to operate in the Kingdom of Saudi Arabia.

• B) The company's capital shall not be less than:

  • • Five hundred thousand Saudi Riyals (500,000) for practicing electronic insurance brokerage only.
  • • Three million Saudi Riyals (3,000,000) for an insurance broker practicing electronic insurance brokerage.
  • • The Central Bank shall determine the minimum additional capital required based on the branches and types of insurance specified by the applicant in the business plan referred to in paragraph (2) of this article.

2. The license application must include a specific business plan for electronic insurance brokerage operations, and this plan must include at least the following:

• A) The branches and types of insurance intended to be offered on the electronic platform and an analysis of the expected volume of electronic insurance brokerage operations over the next three years.
• B) An analysis of the risks associated with electronic transactions and the necessary precautionary measures and procedures to mitigate them, including but not limited to money laundering crimes, strategic risks, and unauthorized data access.
• C) An emergency plan including the procedures to be taken in case one or more elements of the automated system of the electronic platform fail, and this plan must include corrective measures to ensure business continuity, and the mechanism for reporting to the Central Bank and the company.

3. The license application shall be submitted to the Central Bank including all regulatory requirements and documents required by the Central Bank to study the application.

4. A license to practice electronic insurance brokerage shall not be issued without the applicant submitting an insurance policy from one of the insurance companies operating in the Kingdom covering professional liability risks for negligence, carelessness, and error, and the insurance coverage must not be less than (5,000,000) five million Saudi Riyals.

Licensing to practice electronic insurance brokerage activities shall be according to the following:

• First: Submitting the application to the Central Bank in accordance with the procedures stipulated in the Implementing Regulation of the Cooperative Insurance Companies Control Law, in addition to what the Central Bank determines in this regard.
• Second: Subject to the applicability of the conditions outlined in Article Five above "License Granting Requirements," the applicant shall be provided with the Central Bank's decision of preliminary no objection or otherwise.
• Third: In the event that the Central Bank issues a preliminary no objection, the applicant is obligated to connect with at least (5) insurance companies within (60) working days from the date of the preliminary no objection.
• Fourth: The applicant shall launch the trial version of the electronic platform within a period determined by the Central Bank.
• Fifth: After the Central Bank verifies the applicant's compliance with the requirements stipulated in these rules, the Central Bank shall issue a license to practice electronic insurance brokerage activities.

7.1 The Insurance Aggregator shall improve and operate the Electronic Platform to carry out Insurance Aggregation Activities and develop standard technical interfaces through Web Services to ensure the following:

• a) Exchange of information and electronic communication with the Insurance Companies' technical systems in order to exchange basic client information with Insurance Companies.

• b) Enable companies to assess insured risks.

• c) Provide the client with insurance quotes online, the payment method and procedures and policy information once issued by the Insurance Company.

• d) Perform any operations required by Insurance Aggregation Activities.

7.2 Insurance requests, offers and policies shall be submitted, received and issued instantly through the Web Services “API” linked between the Electronic Platform and the technical systems of the Insurance Companies.

7.3 Prior to linking with an Insurance Company the Insurance Aggregator shall ensure that the Insurance Company’s IT infrastructure is ready and equipped to allow information exchange and electronic communication through the web services and Electronic Platform, as per the communication mechanism agreed on and set forth in Paragraph (7.1) above.

8.1 The Insurance Aggregator shall ensure the validity and accuracy of the insurance offers and establish the necessary validation procedures.

8.2 The Insurance Aggregator shall verify the identity of the client, ensure the validity of the information and documents provided by the Client online, through the use of documents, data or information are obtained from reliable and independent sources before providing them to Insurance Companies. The insurance aggregator shall be responsible for the validation. The Insurance Company may electronically verify the information and request any information using any other electronic services.

8.3 The Insurance Aggregator shall keep electronic records of client’s documents and identities obtained through its Electronic Platform.

8.4 In accordance with the instructions issued to ensure security and integrity of the information, the Insurance Aggregator shall establish an electronic record for each client and set the following procedures and measures, as a minimum, to protect the client record:

• a. Verify the client email address and phone number by sending an authentication link; and

• b. Develop the procedures necessary to ensure that information provided is up to date, for example, using the national address.

9.1 The primary purpose of the electronic linkage between insurance companies and electronic insurance brokerage companies shall be to enable the broker to provide electronic insurance brokerage services, and not for other purposes.

9.2 Compliance with and adherence to the instructions issued by the Central Bank regarding the commission rate.

9.3 Communicating with the client on any matter related to the insurance transaction through email and text messages.

9.4 Establishing a mechanism to limit cases of fraud practiced through the sale of insurance products via the electronic platform, including but not limited to the following:

• A) Not accepting insurance for more than five vehicles belonging to the same insured party, and if the maximum allowed number of vehicles is exceeded, the electronic insurance broker must notify the insurance applicant of the possibility to visit the insurance company’s sales points.
• B) Linking the insurance policy to the personal data and information of the insured after verification through a responsible, documented, and independent source.
• C) Automatically linking the national address directly and not allowing manual entry.

Obligations of the Insurance Company:

9.5 Displaying insurance product prices according to the approved underwriting standards.

9.6 Notifying the electronic insurance broker through the electronic platform upon issuance of the insurance policy, and informing them of all policy information including its validity period, coverage limits, and a digitally dated and electronically signed copy of the insurance policy.

9.7 In case of the need to disclose insurance policy information pursuant to relevant laws and regulations:

• A) Providing the necessary disclosures for the insurance policies issued by it.
• B) Ensuring compliance with all regulatory disclosure procedures.
• C) Taking all necessary measures to protect the confidentiality of this information.

Obligations of the Electronic Insurance Broker:

9.8 Approving the business plan for electronic insurance brokerage operations by a decision issued by the company’s Board of Directors or Board of Managers after obtaining the Central Bank’s no-objection, and this plan shall be reviewed annually by the Board of Directors or Board of Managers, provided that the Central Bank’s no-objection is obtained when making any material change to the electronic insurance broker’s strategy.

The Central Bank may request modification or change of the business plan whenever it deems necessary.

9.9 Clarifying the nature of the services provided to clients through the electronic platform, and ensuring that the nature of the relationship between the parties to the insurance transaction is clear.

9.10 Disclosing licensing information to clients.

9.11 Establishing appropriate declarations and undertakings for the client’s review and approval before using the electronic platform.

9.12 Providing a list of insurance companies linked through the electronic platform for clients to view, and the electronic insurance broker must commit to not participating in any marketing campaigns for the linked companies, and not favoring one company over another to ensure minimizing conflicts of interest.

9.13 Clarifying and disclosing through the electronic platform all terms and conditions of use of the electronic platform, security instructions, payment methods, confidentiality of information, and any other instructions related to the use of the platform, in addition to all data required to be disclosed by law.

9.14 Providing a special mechanism on the site that enables the client to upload images and files related to the insured to enable the insurance company to price the policy accurately.

9.15 Using two-factor authentication to complete the policy purchase process, provided that this standard includes the SMS service as one of the two-factor authentication methods, and notifying the client upon issuance of the insurance policy via email and text messages.

9.16 Disclosing its commissions resulting from the insurance policy contracted with clients.

9.17 Notifying clients of any additional fees or expenses for any related services.

9.18 Sending a message to the client via email and text messages clarifying the insurance subscription amount and the complaints management or customer care number at the insurance company.

9.19 Notifying the client of any changes in disclosures and terms.

9.20 Notifying the client in case the insurance company refuses to issue the policy or requests additional documents via email and text messages.

9.21 Providing a feature on the electronic platform that enables clients to communicate directly with the electronic insurance broker’s customer service through the platform.

9.22 Not receiving any insurance premiums on behalf of the company; premiums shall be collected directly by the insurance company.

9.23 Notifying the client sufficiently before the insurance policy expires, with a notice period of no less than 15 days.