Saudi Arabia bans combined insurance and reinsurance businesses

Pedro Gonçalves
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Saudi Arabia bans combined insurance and reinsurance businesses

Regulators in Saudi Arabia have enacted a ban on combining insurance and reinsurance brokerage activities in the same company.

According to a report by Reuters, the prohibition is effective immediately, citing a statement from the Saudi Arabian Monetary Agency (SAMA) issued on January 02.

The Saudi Arabian Monetary Agency said it had taken the decision to increase the stability of the insurance sector, boost its contribution to national economic growth and reduce "wrong practices" in the industry.

Companies that currently combine both activities have one year to implement the decision, and must give SAMA their plans to change within three months.

The restrictions follow on from reports in 2017, when SAMA warned that it was preparing tougher rules for re/insurers as part of a drive to create a smaller number of stronger market players operating in the country.

 

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