The Saudi Arabian Monetary Authority (SAMA) has released draft rules governing the electronic insurance brokerage business.
This step stems from SAMA's keenness of the institution to keep abreast of the latest technological developments in the financial services sector, in order to develop the insurance industry and facilitate the insurance process for policyholders.
SAMA points out that the draft rules specify the requirements and controls necessary for granting a licence to operate online insurance brokerage business, in addition to regulating the relationship between the online insurance broker and insurance companies.
The online broker has to disclose through the electronic platform all the terms and conditions of the use of the electronic platform, security instructions, payment methods, confidentiality of information and any other instructions.
Among requirements stipulated in the draft rules, the online broking platform has to include a mechanism to reduce online fraud.
The online broker also has to provide a feature that enables customers to communicate with customer service directly through the platform, as well as provide a list of insurance companies that are linked with the online platform for customers to refer to.
The online broker must commit too to refraining from participation in any marketing campaigns for the insurance companies with which it is linked, and not to favour one company over another.
The draft states that insurance companies are obliged to notify the online broker through the electronic platform once the insurance policy is issued, and provide all the information related to the insurance policy including the limits of coverage. A digital copy of the insurance policy dated and signed is to be transmitted electronically, in addition to communication with the customer on any matter related to the insurance process. The broker is obliged to notify the customer in the event the insurance company refuses to provide cover or if additional documents are requested, via e-mail and text messages.
The draft directs that the broker use the binary verification system to secure the purchase of the policy.
The deadline for feedback on the draft is 13 November 2019.