Saudi Arabia: Draft rules issued for insurance for cars leased to individuals
Source: Middle East Insurance Review | Jan 2019
The Saudi Arabian Monetary Authority (SAMA) has released a preliminary draft concerning comprehensive insurance requirements for vehicles leased to individuals, as part of the regulator’s continual efforts to develop the financial sector and solve issues faced by customers.
In this instance, the draft regulations were prepared governing the relationships among motor finance companies, customers and insurers operating in the kingdom. Some problems had emerged related to insurance affecting customers of finance companies and commercial banks licensed to engage in financial leasing activities for vehicles.
Through these regulations, SAMA said it aims to give the lessee a standing in the insurance policy alongside the financing party.
Pricing of the insurance policy is based on the lessee (the actual user of the vehicle) who will enjoy discounts on the premiums if he has an accident-free record. The comprehensive insurance policy will also set out the amount of deductible, place and method of repair of any damaged vehicle, including whether repairs are to be carried out at car agency workshops.
Feedback on the draft regulations was submitted to SAMA before 26 December 2018. M