This regulation presents the general principles and minimum standards that should be met by insurance agents and (re)insurance brokers when dealing with insurance companies and their existing and potential clients.
The objective of this regulation is to promote appropriate standards in the business of insurance services provision.
The reading of this regulatory statute must be accompanied by the Cooperative Insurance Companies Control Law and its executive regulations, the Regulatory Statute of Insurance Market Conduct issued by SAMA, in addition to any other regulations, rules, or regulatory instructions issued by the Authority.
The term “Intermediaries” in this Regulation is intended to include insurance agents and (re)insurance brokers.
An Insurance agent is defined as a juristic entity that for compensation represents the insurance company to solicit, procure and negotiate insurance contract.
An Insurance broker is defined as a juristic entity that for compensation negotiates with the insurance company in order to conduct insurance services for policyholders.
A Reinsurance broker is defined as a juristic entity that negotiates contracts of reinsurance between an insurance company and a reinsurance company on behalf of the insurance company, receiving commission for placement and other services rendered from the reinsurance company.
The term “Clients” is defined as the existing and potential recipients who request or acquire an insurance product or service.
The rest of terms which are not mentioned above and used in this regulation shall have the same meaning as per article one of the Implementing Regulations.
Intermediaries must establish appropriate internal controls and procedures to ensure and monitor compliance with this regulation, including controls and procedures of their contracts with insurance companies, with other insurance service providers and with Clients.
Intermediaries must maintain adequate records to demonstrate compliance with this regulation, including, but not limited to, compliance reports, policy records, claims records and complaints records.