• The following words and phrases shall have the meanings set forth opposite each of them wherever they appear herein, unless the context requires otherwise:

  • 1.1 The Bank: The Saudi Central Bank (SAMA).
  • 1.2 The Rules: The rules regulating banking insurance operations.
  • 1.3 The Company: The insurance company licensed to practice insurance activities in accordance with the provisions of the Cooperative Insurance Companies Control Law.
  • 1.4 The Bank: Any bank licensed to practice banking activities in the Kingdom in accordance with the provisions of the Banking Control Law.
  • 1.5 Banking Insurance Operations: Marketing and distributing insurance products through the bank to its clients based on the agreement concluded between the bank and the company.
  • 1.6 The Agreement: A contract whereby the company and the bank agree that the bank will carry out banking insurance operations.
  • 1.7 The Authorized Employee: The bank employee(s) designated in agreement with the company to carry out banking insurance operations.
  • 1.8 The Client: The natural or legal person who deals with the bank.

These Rules shall apply to all Bancassurance Activities. The Cooperative Insurance Companies Control Law, its Implementing Regulation, the Banking Control Law and SAMA’s relevant regulations, rules, and instructions, and relevant laws and regulations issued by other authorities shall govern whatever is not provided for therein and to the extent possible.

The objective of these Rules is to regulate Bancassurance Activities and practices in Saudi Arabia and the relationship between the Company and the Bank in this regard.

• 1. The practice of bancassurance activities shall be conducted directly through the bank, whereby a marketing and distribution channel for the company is established, and the contractual relationship between the company and the bank - within the framework of practicing bancassurance activities - shall not include an insurance agency, insurance brokerage, insurance consultancy, or any of the professions related to insurance.
• 2. The company and the bank must sign an agreement before the bank practices bancassurance activities.
• 3. The company and the bank must obtain the prior approval of the bank before concluding the agreement.
• 4. The agreement must include at least the following:
  • A) Duration of the agreement.
  • B) Cases and procedures for terminating the agreement.
  • C) Specification of electronic and non-electronic marketing and distribution channels through which bancassurance activities will be practiced.
  • D) Training plan for the specialized employees.
  • E) Procedures for applying the Know Your Customer principle.
  • F) Compliance procedures.
  • G) Branches and insurance products to be marketed and distributed.
  • H) Marketing and distribution procedures.
  • I) Procedures for collecting insurance premiums.
  • J) Specification of the bank’s commission, how it is calculated, its due date, and collection procedures.
  • K) Customer care and complaint resolution.
  • L) Procedures for receiving and transferring claims to the company.

• 1- The bank shall be fully responsible for the conduct of the employees specialized in banking insurance activities, and it must ensure that the activities are practiced in accordance with the bank’s instructions and principles of transparency, as follows:

  • 1.1 Ensuring compliance with the terms of the agreement and the procedures contained therein across all the bank’s marketing and distribution channels, and establishing appropriate internal controls and procedures to ensure adherence to the relevant systems, regulations, and rules.

  • 1.2 Maintaining records that demonstrate the bank’s compliance with the provisions of paragraph (1.1).

  • 1.3 Preparing compliance reports on the banking insurance activities agreed upon with the company.

  • 1.4 Ensuring adherence to the limits of insurance policies permitted to be marketed and distributed in accordance with the agreement.

  • 1.5 Maintaining the confidentiality of the company’s and its clients’ data, records, and information.

  • 1.6 Allowing the company to review and audit all the bank’s books and records related solely to banking insurance activities or to obtain copies thereof,

  • The following records shall be prepared:

    • 1. Correspondence register.
    • 2. Internal records.
    • 3. Customer complaints log.

  • 2- The bank shall establish an administrative unit concerned with banking insurance, with governance controls specific to the bank determining its operational procedures, and its tasks and responsibilities shall include at least the following:

    • A) Supervising the bank’s electronic and non-electronic marketing and distribution channels.
    • B) Conducting training courses for specialized employees.
    • C) Establishing procedures for monitoring and verifying that the marketing and distribution of insurance products are conducted honestly, transparently, and fairly.

  • 3- The unit specialized in banking insurance must be supervised by an employee with sufficient experience, whom the bank employs to hold the position of director of the administrative unit specialized in banking insurance after obtaining the bank’s no-objection.

  • 4- Banking insurance activities shall be conducted through the bank’s electronic and non-electronic marketing and distribution channels.

  • 5- The bank must ensure that all specialized employees obtain the Certificate of Fundamentals of the Insurance Profession and any other certificate determined by the bank.

  • 6- The bank must obtain the company’s approval when it wishes to expand the electronic and non-electronic marketing and distribution channels through which banking insurance activities will be conducted, with notification to the bank thereof.

  • 7- The bank is not permitted to conduct banking insurance activities with non-clients.

• 1. The Company shall perform and not assign any of the following authorities to the Bank:

  • a. Make any amendments to the insurance policies or its annexes.

  • b. Settlement of claims.

  • c. Payment of compensation.

• 2. Obtain SAMA’s approval before any material amendments to the Agreement between the Company and the Bank.

• 3. The Company shall provide SAMA with an annual training plan for the Authorised Employees, provided that it includes -at a minimum- the following:

  • a. Training on marketing and distribution techniques;

  • b. Workshops to introduce insurance products; and

  • c. Training on anti-money laundering and counterterrorist financing.

• 4. Maintain the confidentiality of the data and information of the Bank and its Clients.

• 5. The Company shall regularly review the Bank’s practice of Bancassurance Activities, whether through Bank’s electronic or non- electronic channels.

• 6. The Company shall pay the Bank the marketing and distribution of insurance products’ commission as a result of carrying out Bancassurance Activities during the period specified in the Agreement, provided that the commission is in line with SAMA;s instruction.

The Bank is prohibited from requiring the Client to obtain banking products in order to get the insurance products or vice versa, unless the insurance coverage is binding by a competent authority

The Company may sign an Agreement with one Bank or more, and the Bank may sign an Agreement with one Company or more.

• Banks shall comply with professional conduct rules and apply the following requirements:

  • 1- Work with honesty, transparency, and integrity, and fulfill any obligations to customers and the company in accordance with the laws of the Kingdom of Saudi Arabia and their executive regulations. In the absence of a law that fully covers these obligations, the bank shall adhere to the best international practices.

  • 2- Operate within acceptable professionalism when dealing with customers and the company, through appropriate training and experience and consulting experts when necessary.

  • 3- Continuously update the skills and knowledge of specialized employees and keep abreast of the products and services available in the market.

  • 4- Take reasonable precautions to maintain the administrative, financial, operational, and human resources necessary to perform the work and serve customers.

  • 5- Notify customers sufficiently in advance of all relevant information including coverage details, any terms, exclusions, and restrictions on the insurance policy, and ensure customers understand any obligations arising from the contracts concluded to assist them in making an appropriate decision.

  • 6- Take reasonable measures to ensure the accuracy and clarity of information provided by customers and presented to them, providing this information in writing.

  • 7- Handle all data and information obtained regarding the company and customers with the utmost confidentiality, and take appropriate measures to maintain the confidentiality of any documents in their possession, with the necessity to do the following:

    • • Obtain data and use it for the purpose of applying the business subject to these rules, and not use it for any purpose other than that for which it was collected.
    • • Maintain the security of data and update it.
    • • Commit to providing data related to insurance coverage to customers upon submission of a written request to obtain it.
    • • Not disclose any data to any other party without prior permission from SAMA, except for external auditors affiliated with the banks or the company or entities licensed to retain insurance or credit data.

  • 8- Banks shall not encourage customers to cancel a valid insurance policy nor encourage customers to reject any offer made by a competing party based on an incorrect or unfair evaluation merely to increase the earned commission.

  • 9- Ensure customers fully understand the services provided by banks regarding bancassurance and the nature of the relationship between the parties.

  • 10- Notify the company of all information or documents related to customers’ insurance that may affect the decision made by the company when providing insurance coverage concerning prices, terms, and conditions.

  • 11- Immediately notify customers of the company’s decision to accept or reject providing insurance coverage.

  • 12- Clarify the mechanism for paying insurance premiums and any other additional amounts due from customers to the company.

  • 13- Inform customers that the contractual relationship will be with the company.

• 1. Pre-marketing and distribution Communication with Clients:

  • 1.1 Advertising:

    • a) Ensure that advertisements are not misleading, over-stated or offensive ;

    • b) Ensure that advertisements does not breach the laws or omit any regulatory requirement;

    • c) Ensure that advertisements does not damage Clients’ faith or exploit their lack of experience or knowledge.

    • d) Obtain the approval from the Company if the Company is mentioned in the advertisement.

  • 1.2 providing Advice:

    • Banks shall provide advice on matters within their field of expertise and seek or recommend the help of experts when necessary.

  • 1.3 Client Service:

    • a. Understand all the terms and conditions of all policies offered to the Clients ; and

    • b. Understand the Clients’ profile, coverage needs, and appetite for risk.

  • 1.4 Regulatory Requirements:

    • a. The Bank shall ensure that all documents issued are consistent with the regulatory and supervisory requirements;

  • 1.5 Documentation:

    • a. Ensure that all written terms and conditions are fair in substance and that the Clients' rights and responsibilities are set out, clearly and in plain understandable language.;

    • b. Send policy documentation to the Clients without avoidable delay;

    • c. Send a written advice along with the policy documentation stressing on the importance of reading it carefully ; and

    • d. Ensure that instruction letters, policies and renewal documents contain details of complaints handling procedures.

• 2. Marketing and distribution of Insurance Products and Services

  • 2.1 Marketing and distribution Practices:

    • a. Ensure that the Clients understand the type of service being offered.

    • b. Ensure that the policy proposed is suitable for the Client’s needs;

    • c. Provide the Clients with comparisons in terms of price, coverage and services offered when offering several products.
      d. Notify the Clients promptly if unable to obtain the requested insurance.

    • e. State the validity period for quotation if the proposed contract was not signed immediately; and

    • f. Explain to the Clients their obligations to file claims immediately and to disclose all material facts relevant to the insurance coverage.

  • 2.2 Providing of Information:

    • a. Request the Clients to make true, fair and complete disclosure and ensure that the consequences of nondisclosure of information and inaccuracies are pointed out to clients. ;

    • b. Avoid influencing and pressuring the Clients along with emphasizing that all acknowledges or statements given are his/her own responsibility.

    • c. Require the Clients to carefully check the information given in the documents. ;

    • d. Explain to the Clients the importance of disclosing all subsequent changes that might affect the coverage throughout the duration of the policy. ; and

    • e. Disclose of all information required for the purpose of insurance on behalf of the Clients with the Client's written consent and provide a clear presentation to the Company about the Client's risk description.

  • 2.3 Interpretation of Contracts:

    • a. Explain all the essential provisions of the coverage provided by the policy to Clients. ;

    • b. Notify the Clients with the Company’s quotation exactly as provided; and

    • c. Notify the Clients of any significant or unusual restrictions or exclusions in the insurance policy, and explain the termination procedures.

  • 2.4 Charges:

    • a. Disclose to the Clients the amount with the profits and commissions they are receiving upon selling the policy.

    • b. Inform the Clients in writing of any additional fees or charges for any related services.

• 3 Post marketing and distribution Client Service

  • ​​​​​​​3.1 Confidentiality of Information:

    • a. Ensure that Clients data and confidential documents are stored safely with restricted access. ; and

    • b. Ensure that only relevant parties can obtain the Clients’ data such as the Company and external auditors of the Bank and the Company.

  • 3.2 Clients Notification:

    • The Bank shall promptly communicate any notifications received from the Company to the Client related to his insurance policy, along with obtaining a receipt of acknowledgments.

  • 3.3 Renewal of Insurance Policy:

    • a. Ensure that renewal notifications include Clients’ duties to disclose changes affecting the policy, which have occurred since the policy inception or the last renewal date ;

    • b. Ensure that renewal notification contains a requirement for keeping records, including copies of letters, of all information supplied to the Company for the purpose of renewal of the contract ;

    • c. Ensure that the Clients are aware of the expiry date of the policy even if the Company has no intention to renew.

    • d. Ensure that the Clients receive the renewal notice of the policy issued by the Company before its expiration.

  • 3.4 Claims handling :

  • The Bank shall not approve or settle claims. However, the Bank shall:

    • a. Immediately acknowledge filed claims;

    • b. Provide claim forms along with clarifying the information or procedures needed to be done the Client to file the claim;

    • c. Provide adequate instructions to the Clients on filing claims and information on claim handling;

    • d. Provide the Clients with an acknowledgement of receipt or a notification of any missing information or documents, within seven days of receiving the claim;

    • e. Notify the Clients of any development regarding the claim at least once every 15 working days;

    • f. Notify the Clients in writing of claim acceptance or rejection; and

    • g. Explain the method of filing complaints and procedures of dispute resolution if the Client is not satisfied with the settlement reached.

  • 3.5 Client Complaints:

  • a. Receive complaints, by phone or in writing such as letters, e-mail or fax;

  • b. Explain complaint filing procedures;

  • c. Provide the Clients with the contact information of the Company to follow up on their complaints;

  • d. Notify the Clients of the developments in their complaints;

  • e. Respond to the complaints within (15) days of filing; and f. Maintain an electronic system to record and follow up on complaints.