Saudi Arabia: SAMA issues exposure draft of marine insurance regulations
Source: Middle East Insurance Review | Jun 2023
The Saudi Central Bank (SAMA) has been drafting a set of regulations called Marine Insurance Coverage Instructions.
SAMA’s objective is to develop a comprehensive regulatory framework for mandatory marine insurance, to define acceptable minimum limits for benefits and coverage and to ensure compliance with international agreements and treaties and all requirements set out in the Commercial Maritime Law. The framework also aims to protect the rights of customers, promote the stability of the sector and raise the standard of insurance services.
The Instructions will apply to the following mandatory coverages:
- Liability of the operator of a carrier towards third parties for death, civil injury, and damage to property
- Liability of the operator towards the vessel’s crew for death and civil injury
- Liability for material and environmental damages that may result from the vessel.
- Liability for damages arising during the transportation of oil to and from Saudi Arabia
- Responsibility for crew members of ships registered under the Saudi Arabian flag plying in areas where there are the dangers of war, piracy or armed robbery
- Liability towards third parties for risks arising from the operation of the ship
- Responsibility to remove debris
- Liability for pollution caused by a ship’s oil fuel
- Liability of the ship owner for oil pollution damages.
The subject matter of marine insurance in non-compulsory coverages could include the following:
- The vessel and its equipment that are under construction
- Cargo, cargo containers and any property on the ship
- Fare, passenger fare, commission and any similar sum of money.
The insurance policy shall be in the name of the owner or charterer of the ship or marine unit.
The prospective insured party has the obligation to notify the insurer of all circumstances known to him/her that are essential for assessing the risk by the insurer, determining the terms of the policy and deciding whether to accept the insurance proposal.
After signing the marine insurance policy, the insured has the obligation to notify the insurer of any circumstance, which leads to a significant increase in risk.
SAMA published an exposure draft of the Instruction and is inviting stakeholders and the public to provide feedback on the proposed regulations. The proposed instructions were drafted in collaboration with the Transport General Authority. M