Al-Ahlia Insurance Co. received, on Sept. 13, a letter from the Saudi Arabian Monetary Authority (SAMA) informing the decline of actual solvency margin, compared to the required level, as per the requirements of Article 66 of the Cooperative Insurance Companies Control Law.
In addition, the insurer was unable to comply with its corrective plan submitted to the authority on December 31, 2019, for two consecutive quarters, according to a bourse statement.
According to SAMA’s letter, Al-Ahlia is required to submit the procedure it deems appropriate to maintain the solvency margin to the authority for approval within 20 business days from the date of the letter.
In the event of not complying with the letter’s requirements within the specified period, SAMA will take appropriate legal measures against the insurer.
Action will be initiated under Clause (D) of Article 68 of the Cooperative Insurance Companies Control Law, which states that if the actual solvency margin is less than 25%, or the company fails to correct its financial position, SAMA may appoint a consultant to advise the company or request the withdrawal of the company’s license.
Al-Ahlia added that it will submit the appropriate procedures for approval to SAMA in order to raise the solvency margin to the required level.
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