Saudi Arabia: SAMA releases draft bancassurance rules
Source: Middle East Insurance Review | Mar 2020
The Saudi Arabian Monetary Authority (SAMA) has started a consultation exercise on draft rules governing bancassurance.
Through the rules, SAMA expects to increase the contribution of the insurance sector to the national economy.
The proposed rules aim to expand the scope of distribution and marketing of insurance products through banks; to facilitate access to insurance products, as well as to regulate the relationship between the insurer and the bank.
The rules would play a substantial role in raising demand and awareness of savings products by promoting insurance in isolated areas. Some of the requirements set out in the draft rules are:
- The insurer and the bank shall sign an agreement, containing appropriate details, before the bank starts practising bancassurance activities. The company shall obtain SAMA’s prior approval before signing the agreement.
- The bank shall ensure that all employees authorised to handle bancassurance have passed the Insurance Foundations Professional Exam (IFCE) and any other certification specified by SAMA. The bank must obtain the insurer’s approval to expand the number of branches or electronic channels through which bancassurance activities are provided as well as SAMA’s prior approval.
- The bank shall deposit insurance premiums directly into the insurer’s account.
- The insurer shall perform and not authorise the bank to: issuance of insurance policies, its annexes or endorsements; settlement of claims; and payment of compensation.
The drafting of the rules and their later implementation are a continuation of SAMA’s role of developing the financial services environment and aligning with the latest technical developments in the insurance industry in line with the regulator’s objectives of insurance market growth. M