Principles to be applied to the regulation of branches of foreign insurance companies established in Saudi Arabia

Confirmation that the branch will make a statutory deposit of SR 10m for an insurer or SR 20m for a reinsurer, which may be part of the net assets referred to in paragraph 2.5 above. Where SAMA concludes that the risk profile of the applicant’s business warrants it, the statutory deposit may be increased up to a maximum of SR 15m for an insurer or SR 30m for a reinsurer. The branch shall place the statutory deposit amount, within three (3) months of the date of issuing the license, in a bank designated by SAMA. The Agency shall invest the statutory deposit and shall be entitled to its earnings. 2.8 Confirmation that the branch in Saudi Arabia will operate in accordance with the Cooperative Insurance Law and its implementing regulations. 2.9 Confirmation that the branch in Saudi Arabia will not engage in any activities other than insurance and reinsurance activities for which it is authorised by SAMA. 3. SAMA will not authorize a branch of a foreign insurance company or a branch of a foreign reinsurance company to operate in Saudi Arabia unless: 3.1 It maintains a presence and premises in the Kingdom appropriate to the nature and scale of its activities in Saudi Arabia. 3.2 It establishes appropriate management and accounting procedures in Saudi Arabia, which will enable the preparation of its accounts concerning its business, carried on in Saudi Arabia and keep in Saudi Arabia all the necessary records for this business. 3.3 It designates the General Manager for the branch, who is resident in Saudi Arabia, authorised to act generally, and to accept service of any document, on behalf of the applicant company. 3.4 All managerial roles defined by the Implementing Regulations and SAMA are carried out by designated individuals resident in Saudi Arabia. 3.5 The General Manager for the branch, controllers and managers of the applicant company are fit and proper persons. 4. A foreign insurance company wishing to obtain a licence to operate an insurance branch in Saudi Arabia must make an application to SAMA which contains information similar to that required under Article 4 of the Implementing Regulations. The information should be in respect of the business as a whole for paragraphs 1 to 4 and the Saudi operation for paragraphs 4 to 7 of the First part of Article 4. The bank guarantee in paragraph 8 of the First part of Article 4 must cover the excess assets referred to in paragraph 2.5 above. 5. In addition to the information required under paragraph 4 above, a foreign insurance company wishing to obtain a licence to operate an insurance branch in Saudi Arabia must also supply the following: 5.1 A projection of world-wide premium income both gross and net of reinsurance ceded in each of the first five financial years following authorisation and broken down between Saudi Arabia and elsewhere. 5.2 A summary of the risks the company will underwrite outside Saudi Arabia. 5.3 A summary of the reinsurance arrangements for the business of the company written outside Saudi Arabia including the company's maximum retention per risk or event after all reinsurance ceded and the names of the principal reinsurers. 5.4 A statement showing the current margin of solvency of the company (after application of valuation regulations), the margin of solvency required and how both have been calculated on both a home country and SAMA basis.