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Read moreInsurance Authority (IA): Unifying regulatory power for Saudi Arabia’s insurance sector
The Kingdom of Saudi Arabia (KSA) has recently made significant changes to its regulatory landscape with the establishment of the Insurance Authority (IA), a new unified regulatory body responsible for overseeing the insurance sector. As of March 4, 2024, all responsibilities previously managed by the Council of Health Insurance (CHI) and the Saudi Central Bank (SAMA) have transitioned to the IA, centralising authority under one entity. This transition marks a transformative step aligned with the goals of the Financial Sector Development Program (FSDP), which prioritise a resilient unified and competitive insurance market.
The formation and remit of the IA
The IA officially commenced operations on November 23, 2023, following its establishment by Saudi Arabia’s Cabinet on August 15, 2023 (royal decree No. 85). The founding law, which includes 15 key articles, grants the IA broad powers, including:
- Issuing regulations and instructions for the insurance sector.
- Licensing and supervising insurance companies.
- Imposing penalties on companies that breach regulations.
- Managing the Committees for Resolution of Insurance Disputes and Violations (IDC), previously overseen by SAMA.
The IA’s unified mandate reflects Saudi Arabia’s push for regulatory consolidation, which will enhance the efficiency and growth of the sector. This shift not only simplifies compliance for insurance companies but also strengthens consumer protection and dispute resolution, thus promoting investor confidence.
Centralised consumer services and communication
With the IA as the sole regulatory body, the process for lodging complaints and inquiries has also become more streamlined. Policyholders can now easily reach the IA through:
- Toll-free number: 8001240551 for complaints and queries.
- Online portal: care.ia.govt.sa.
- Social media: The ‘IA CARE’ account on "X" (formerly Twitter), dedicated to consumer protection.
This centralisation simplifies the communication process, making it easier for stakeholders to address issues, access support and stay informed about regulatory changes.
The transitional period and impact on existing frameworks
During the transition phase, current regulations issued by SAMA and CHI remain in force until the IA introduces new overarching regulations. This approach minimises disruption to the insurance market and ensures continuity for existing insurance policies, claims and contractual relationships. Additionally, the specialised IDC tribunal will continue to handle insurance disputes, maintaining stability and familiarity in the sector's dispute resolution processes.
A catalyst for growth in Saudi Arabia’s insurance sector
The IA’s establishment is already showing positive outcomes. In Q3 2023, the insurance sector reported a 14.6% growth. This early success, coupled with the IA’s forthcoming national strategy, indicates that Saudi Arabia’s insurance sector is on a promising growth trajectory. The IA is expected to release a comprehensive legal framework that will guide the sector’s development, contributing to a transparent, robust market.
Conclusion
The Insurance Authority is set to play a pivotal role in shaping the future of the insurance industry in Saudi Arabia. With a centralised approach, enhanced regulatory clarity, and a mandate for sector growth, the IA is positioned to foster a strong, resilient insurance market that meets the needs of the Kingdom’s rapidly evolving economy.
As the IA continues to roll out its initiatives and framework, stakeholders can expect increased transparency, streamlined regulatory processes, and new opportunities within Saudi Arabia’s insurance landscape—further solidifying the Kingdom’s position as a key player in the regional and global insurance markets.