Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank and insurance market regulator, has banned Malath Cooperative Insurance & Reinsurance Co. from issuing new auto insurance policies or renewing current ones, effective Aug. 20, 2017, the insurer said in a statement to Tadawul.
Malath Insurance failed to meet regulatory requirements on insurance claims and customer complaints.
Accordingly, SAMA has directed the insurer to adopt a corrective plan so that it can deal with insurance claims settlements and process customer complaints. The insurer also has to submit a detailed report to explain the measures taken in this regard.
The ban only applies to mandatory auto insurance policies (third party insurance) and does not include comprehensive vehicle insurance or other types of policies, the statement said.
The decision does not affect clients who already have valid insurance policies.
The ban will likely weigh on the insurer’s sales in the short term; however, no negative impact is expected on the company’s financial position.
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