The Council of Ministers
After reviewing the correspondence received from the Royal Court No. 57460 dated 21/8/1444 AH, which includes the letter of His Excellency the Minister of Finance, Chairman of the Financial Sector Development Program Committee No. 9164 dated 2/9/1442 AH, and the telegram of His Excellency the Minister of Human Resources and Social Development, Chairman of the Preparatory Committee for Administrative Regulation No. 116278 dated 13/6/1443 AH, regarding the establishment of an insurance authority that is financially and administratively independent, specialized in organizing, developing, and supervising the insurance sector in the Kingdom.
After reviewing the draft statute of the Insurance Authority.
After reviewing Royal Order No. (55685) dated 30/11/1438 AH.
After reviewing the Cooperative Health Insurance Law, issued by Royal Decree No. (M/10) dated 1/5/1420 AH.
After reviewing the Cooperative Insurance Companies Control Law, issued by Royal Decree No. (M/32) dated 2/6/1424 AH.
After reviewing the rules and arrangements regarding the treatment of employees and workers in the sectors targeted for transformation and privatization, issued by Council of Ministers Decision No. (616) dated 20/10/1442 AH.
After reviewing memoranda No. (727) dated 27/3/1443 AH, No. (2799) dated 14/12/1443 AH, No. (838) dated 9/3/1444 AH, No. (2725) dated 8/9/1444 AH, No. (3256) dated 3/11/1444 AH, No. (71) dated 9/1/1445 AH, and No. (298) dated 27/1/1445 AH, prepared by the Bureau of Experts at the Council of Ministers.
After reviewing the recommendation of the Council of Economic and Development Affairs No. (4-6/44/T) dated 16/7/1444 AH.
After reviewing the minutes prepared by the Council of Economic and Development Affairs No. (220/45/M) dated 25/1/1445 AH.
After reviewing the recommendation of the General Committee of the Council of Ministers No. (1026) dated 27/1/1445 AH.
It is decided as follows:
First: Approval of the establishment of an authority named (Insurance Authority), according to its statute in the attached form.
Second: The Insurance Authority shall exercise all powers and responsibilities related to the insurance sector, as stipulated in the Cooperative Health Insurance Law, issued by Royal Decree No. (M/10) dated 1/5/1420 AH, and the Cooperative Insurance Companies Control Law, issued by Royal Decree No. (M/32) dated 2/6/1424 AH, provided that the Authority shall establish a mechanism for coordination with the Council of Health Insurance – within a period not exceeding three (3) years from the date of approval of this decision – to transfer all powers and responsibilities related to the insurance sector stipulated in the Cooperative Health Insurance Law.
Third: The General Secretariat of the Committees for Resolution of Insurance Disputes and Violations shall be affiliated with the Insurance Authority.
Fourth: The regulations, rules, and instructions issued pursuant to the Cooperative Insurance Companies Control Law and the Cooperative Health Insurance Law, referred to above, shall remain in effect until the completion of the statutory procedures regarding the draft Insurance Law and its enforcement.
Fifth: The Chairman of the Board of Directors of the Insurance Authority shall carry out the duties of the Board of Directors until it is formed, limited to exercising the Board’s powers related to managing its affairs, excluding powers related to approving financial and administrative policies and regulations.
Sixth: The nomination of the members of the Board of Directors of the Insurance Authority shall be approved by the Council of Economic and Development Affairs in accordance with Article (5) of the statute – referred to in paragraph (First) of this decision – after obtaining the views of the Financial Sector Development Program Committee.
Seventh: Exceptionally from the provisions of paragraph (2) of Article (10) of the statute – referred to in paragraph (First) of this decision – the first fiscal year of the Insurance Authority shall start from the date of the statute’s enforcement and end at the end of the following fiscal year of the state.
Eighth: The exercise by the Board of Directors of the Insurance Authority of its powers stipulated in paragraph (12) of Article (6) of the statute – referred to in paragraph (First) of this decision – shall be in agreement with: the Ministry of Finance and the Non-Oil Revenues Development Center, until the issuance and enforcement of the regulations on the practice of public authorities and institutions and their equivalents imposing fees for the services and works they provide.
Ninth: The Chairman of the Board of Directors of the Insurance Authority and His Excellency the Minister of Finance shall agree on all matters related to the investment of the Authority’s funds and the establishment of appropriate mechanisms that enable the Authority to benefit from its revenues and fees for the services and works it provides, without prejudice to the provisions of Royal Order No. (55685) dated 30/11/1438 AH, and ensuring the financial sustainability of the Authority.
Tenth: Formation of a committee at the Saudi Central Bank with representatives from: the Ministry of Finance, the Ministry of Human Resources and Social Development, the Ministry of Health, the Saudi Central Bank, the Financial Sector Development Program, and the Council of Health Insurance, to take necessary actions regarding the following:
- 1- Transfer of employees and workers in the insurance sector and the (vacant and occupied) positions related to this sector in each of the (Saudi Central Bank and the Council of Health Insurance) to the Insurance Authority, and proposing what it deems appropriate in this regard, in accordance with the rules and arrangements regarding the treatment of employees and workers in the sectors targeted for transformation and privatization, issued by Council of Ministers Decision No. (616) dated 20/10/1442 AH.
- 2- Transfer of properties, documents, financial allocations, and initiatives related to the insurance sector from the Saudi Central Bank and the Council of Health Insurance to the Insurance Authority.
- This shall be done within a period not exceeding sixty (60) days from the date of enforcement of the statute – referred to in paragraph (First) of this decision – and reporting on what requires reporting.
Eleventh: The Council of Health Insurance, when studying its draft statute pursuant to the kind directive conveyed by Royal Court telegram No. 28628 dated 6/5/1443 AH, shall take into account the following:
- 1- Its roles are: enforcing mandatory health insurance, determining those covered by mandatory coverage, accrediting and qualifying health service providers to provide services to health insurance beneficiaries, supervising behavioral aspects thereof, and supervising the operation of the Nafis platform (SHIB).
- 2- Studying the appropriateness of replacing its draft statute with the relevant regulatory provisions contained in the Cooperative Health Insurance Law or proposing what it deems appropriate in this regard, taking into account what is stated in this decision, and coordinating with the Ministry of Health (Health Sector Transformation Program) regarding the transfer of relevant statutory provisions – contained in the Cooperative Health Insurance Law – to the Health Law, for which the kind directive was conveyed by Royal Court telegrams No. 32054 dated 12/6/1442 AH and No. 17370 dated 18/3/1443 AH.
Twelfth: The Insurance Authority shall review the laws, royal orders, royal decrees, decisions, and instructions related to the insurance sector in light of what is stated in its statute – referred to in paragraph (First) of this decision – and propose what is necessary regarding them, and report on that to complete the necessary statutory procedures, taking into account the provisions intended to be included in the draft Insurance Law.
Thirteenth: The Insurance Authority shall coordinate with the Saudi Central Bank when exercising the powers and duties stipulated in its statute – referred to in paragraph (First) of this decision – and the relevant laws related to the insurance sector that affect monetary conditions and financial sector stability.
Prime Minister
Statute of the Insurance Authority
Article 1
In this Statute, the following words and phrases shall have the meanings assigned thereto:
Authority: Insurance Authority.
Board: Board of Directors of the Authority.
Chairman: Chairman of the Board.
CEO: Chief Executive Officer of the Authority.
Statute: Statute of the Authority.
Article 2
The Authority shall have a public legal personality and financial and administrative independence, and shall report to the Prime Minister. Its headquarters shall be in the city of Riyadh, and it may establish branches within the Kingdom.
Article 3
The Authority aims to regulate, supervise, and monitor the insurance sector in the Kingdom to support and enhance its effectiveness. It also seeks to raise insurance awareness, protect the rights of the insured and beneficiaries, stabilize, develop, and promote the insurance sector, contribute to financial stability, and promote the principles and elements of the insurance contractual relationship.
Article 4
The Authority is the entity in charge of regulating, supervising, monitoring, and developing insurance activities in the Kingdom. It shall, in addition to its functions as prescribed by law and without prejudice to the functions and responsibilities of other agencies, undertake what it deems necessary to achieve its objectives, including the following:
1. Developing the national strategy for the insurance sector, and submitting it for completion of legal procedures.
2. Developing general policies, plans, and programs relating to the insurance sector, submitting any matter related thereto that requires completion of legal procedures, and monitoring their implementation.
3. Proposing draft laws relating to the Authority's functions and amendments to applicable laws, and submitting the same for completion of legal procedures.
4. Encouraging investment in the insurance sector in coordination with the relevant agencies.
5. Developing procedures for collecting, maintaining, and using insurance data as well as setting a mechanism for benefiting therefrom, in accordance with legal procedures.
6. Conducting studies, research, and information and data analyses relating to the insurance sector.
7. Setting the licensing requirements for engaging in insurance activities, handling incorporation applications and granting licenses for such activities, and setting the requirements for engaging in each type of insurance.
8. Preparing and publishing bulletins and statistical reports relating to the insurance sector.
9. Proposing mechanisms for developing the insurance on the projects and investments of public agencies in the Kingdom, and assessing the need for mandatory insurance for the activities overseen by such agencies, in a manner that promotes and develops the insurance sector, in coordination with relevant agencies and in accordance with legal procedures.
10. Providing public agencies, private entities, and international bodies as well as individuals with official statistics on the insurance sector in accordance with legal procedures.
11. Preparing reports and establishing databases relating to the Authority's activities as well as exchanging information with local, regional, and international entities, including studying and analyzing the economic impact of the insurance sector in coordination with relevant agencies, and completing any necessary procedures.
12. Developing and conducting programs and courses in the field of insurance, training and qualifying individuals specialized in such field, and developing tests and requirements relating to licensees and the insurance activities in which they engage, in coordination with relevant agencies.
13. Holding conferences, seminars, and meetings relating to the Authority's functions in accordance with legal procedures.
14. Cooperating and exchanging expertise with regional and international entities and organizations, and specialized consulting firms in the Kingdom and abroad, within the limits of the Authority's functions.
15. Representing the Kingdom in regional and international bodies, organizations, forums, and conferences relating to the Authority's functions, in accordance with legal procedures.
Article 5
The Authority shall have a board of directors composed of a chairman and five members, including members with competence and experience in the Authority’s activities. The appointment of the chairman shall be pursuant to a royal order, and the appointment of the members shall be pursuant to an order by the Prime Minister upon the nomination of the Council of Economic and Development Affairs. Board membership shall be for a term of three years, renewable twice.
Article 6
The Authority’s Board shall be the body with the highest authority; it shall be in charge of overseeing the Authority’s management and the conduct of its affairs, and shall, within the limits of this Statute and pursuant to relevant laws, take all the decisions necessary to achieve its objectives. The Board shall, in particular, have the following powers:
1. Approving the national strategy for the insurance sector in preparation for completion of legal procedures.
2. Approving the Authority's general policies and the plans and programs necessary for their implementation, and submitting matters requiring completion of legal procedures.
3. Approving the Authority’s organizational structure.
4. Approving the Authority’s administrative and financial regulations and other regulations necessary for the conduct of its affairs, provided that the approval of administrative regulations is in agreement with the Ministry of Human Resources and Social Development, and that the approval of financial regulations and provisions having financial impact in the administrative regulations is in agreement with the Ministry of Finance.
5. Proposing laws relating to the Authority's functions and amendments to applicable laws, and submitting the same for completion of legal procedures.
6. Approving the establishment of Authority branches.
7. Approving the Authority's draft budget, final accounts, and annual report as well as the auditor's report in preparation for submission in accordance with legal procedures.
8. Appointing the employees tasked with inspecting, monitoring, and detecting violations of the provisions of laws relating to the insurance sector.
9. Appointing an external auditor, or more, and a comptroller.
10. Reviewing periodic reports on the work progress of the Authority and the performance of the executive management, and taking necessary actions thereon.
11. Approving the conclusion of agreements, protocols, and contracts in accordance with legal procedures.
12. Determining the fees for the services and works provided by the Authority.
13. Approving the Authority's key performance indicators.
14. Accepting gifts, donations, grants, bequests, and endowments in accordance with legal procedures.
The Board may, in exercising its powers and without prejudice to the duties entrusted thereto, form standing or ad hoc committees from among its members or others and assign certain tasks to such committees. The formation decision of each committee shall name its head and members and shall specify its functions. Such committees may seek the assistance of any person deemed appropriate thereby to carry out the tasks assigned thereto. The Board may also delegate certain powers to its Chairman or any of its members, or to any of the Authority’s employees.
Article 7
1. Board meetings shall be held at the Authority’s headquarters, and shall be chaired by the Chairman or his designee from among Board members. Board meetings may be held elsewhere within the Kingdom.
2. The Board shall convene periodically at least four times a year, and as deemed necessary by the Chairman or if requested by at least one-third of its members.
3. The call for a meeting shall be made in writing by the Chairman in ample time prior to the date set for the meeting as determined by the Chairman. The call shall be accompanied by the meeting agenda.
4. Board meetings shall be valid if attended by at least the majority of its members, including the Chairman or his designee from among Board members. Board decisions shall be passed by the majority vote of attending members; in case of a tie, the meeting chairman shall have the casting vote.
5. Board deliberations and decisions shall be recorded in minutes signed by the meeting chairman and attending members.
6. The Board may, if the need arises, in urgent cases, or at the Chairman's discretion, hold its meetings and vote on decisions remotely using means of technology. Board decisions may be passed by circulation; in such case, the decision shall be signed by all members to indicate that they have viewed it. Decisions issued by circulation shall be passed by the majority vote of Board members, provided that such decisions are circulated to and voted on by all members.
7. A Board member may not abstain from voting, nor vote by proxy. An objecting member may have his objection and the grounds therefor entered into the meeting minutes.
8. A Board member may not disclose any of the Authority's confidential information even after the termination of his membership in the Board.
9. The Board may invite specialists and advisors to attend its meetings in a non-voting capacity.
Article 8
The Authority shall have a CEO appointed pursuant to a decision by the Board. The decision shall determine his remuneration as well as his financial and employment benefits. The CEO shall be in charge of managing the Authority’s affairs within the limits of this Statute and pursuant to Board decisions, and he shall be entrusted with the following powers:
1. Overseeing the preparation of the national strategy for the insurance sector, and submitting it to the Board for necessary action.
2. Proposing the general policies, plans, and programs of the Authority which are necessary for achieving its objectives, and submitting the same to the Board for necessary action.
3. Proposing the Authority’s organizational structure and submitting it to the Board for necessary action.
4. Proposing the Authority's regulations, including the administrative and financial regulations, and monitoring their implementation upon approval.
5. Overseeing the Authority's work progress in accordance with its approved regulations, plans, and programs.
6. Overseeing the preparation of the Authority's draft budget, draft final accounts, and annual report, and submitting the same to the Board.
7. Representing the Authority before the judiciary and government agencies and before relevant institutions, entities, and organizations as well as before other bodies, and representing the Authority in conferences or events within the Kingdom and abroad. He may delegate said power to others.
8. Approving the holding of conferences, seminars, and meetings related to the Authority's functions in accordance with legal procedures.
9. Signing agreements, protocols, and contracts upon the Board’s approval, or according to the powers granted thereto by the Board.
10. Proposing the fees for the services and works provided by the Authority, and submitting the same to the Board.
11. Appointing and supervising the Authority's employees in accordance with relevant laws and regulations.
12. Any other power assigned to him by the Board.
The CEO may delegate certain powers to any of the Authority’s employees.
Article 9
1. The Authority's resources shall consist of the following:
a) Fees for the services and works provided by the Authority.
b) Returns on investments of its available financial resources.
c) Gifts, donations, grants, bequests, and endowment revenues accepted by the Board.
d) Fines imposed by the Authority on violators of laws relating to the insurance sector.
e) Any other resource approved by the Board, provided that such resource is not inconsistent with laws and instructions.
2. The Authority shall open an account with the Saudi Central Bank, and may open other accounts with any of the banks licensed to operate in the Kingdom. Disbursement from such accounts shall be made in accordance with the Authority's budget and financial regulations.