IA endorses licensing rules for underwriting activity

Logo of Insurance Authority

The Insurance Authority approved the licensing requirements for insurance underwriting activities, which comes as part of its efforts to develop the regulatory framework of the insurance sector, enhance professional practices, support market stability, and improve governance standards.

In a statement, the authority said that underwriting is a core professional activity in the insurance sector, as it involves assessing insured risks, setting coverage terms, and determining appropriate premiums, which helps ensure disciplined pricing and improves risk management efficiency.

The regulation outlines several key requirements for practicing underwriting activity, including obtaining IA license before practicing the underwriting activity, having the company’s headquarters located within Saudi Arabia, maintaining a minimum capital of SAR 1 million, and providing professional indemnity insurance coverage of no less than SAR 3 million.

The requirements also include ensuring availability of qualified professionals and specialized technical expertise, meeting governance, compliance, and risk management requirements, and submitting a clear business plan and organizational structure when applying for a license.

Moreover, the regulation also includes clear procedures for submitting licensing applications, such as providing required legal documents, a business plan, and a financial study, along with compliance with regulatory requirements.