The decision of the Saudi Arabian Monetary Authority (SAMA) on prohibiting the same company from combining insurance and reinsurance brokerage activities is applicable to brokers only, Adel Al-Eisa, media spokesperson for Saudi insurance companies, told Al-Arabiya TV.
“Almost 88 small and medium-sized insurance brokers in Saudi Arabia are required to comply with this decision, while no insurer in the local market is providing the brokerage service,” Al-Eisa said.
The decision will help promote transparency in insurance contracts, which will create jobs and enhance confidence in the local market amid the presence of specialized firms.
Brokers that exercise insurance and reinsurance activities will be negatively affected, as they will have to establish a second company with more administrative expenses.
Last week, the Saudi Arabian Monetary Authority (SAMA) banned brokerage firms from combining insurance and reinsurance activities effective from Jan. 2, 2020, Argaam reported.
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