Saudi Arabian Monetary Agency (SAMA) has started
freezing the bank accounts of unlicensed insurance companies that are
still operating in the Kingdom from abroad.
SAMA, which supervises the Kingdom's insurance
sector, took the punitive measure after serving them notice.
Regulations were issued months ago instructing all insurance companies
to register themselves to obtain a license and to comply with the new
insurance law. They were also warned that defaulters would be
prosecuted and the companies' operations will be shut down.
SAMA later gave a month's notice to those companies
to settle all claims and withdraw from the market. "Any remaining
unsettled claims will be paid by SAMA and the agency will take legal
action against the companies in their home countries to claim the
amounts paid on their behalf," said SAMA officials. According to
a report around 17 companies will be affected by the decision.
Financial Transaction House (FTH) Vice President
Andrei Ugarov told Arab News that "the government is cracking
down on unlicensed insurance companies to regularize the insurance
He said "new licenses have been issued to 13
companies recently and more are expected to be licensed soon. A
regularized insurance market is good for the customers because it will
eliminate companies, which do not have adequate capital to meet claim
Basil M. Al-Ghalayini, CEO of Jeddah-based BMG
Financial Advisors, said: "It's a good move by the government for
the companies which have not yet submitted their applications as these
small insurance companies are not fit and proper to be qualified. They
will eventually sell their portfolios and liquidate or merge with
other companies. SAMA has already asked these companies to submit
their exit strategy."
Earlier, only one insurance company was officially
licensed to work in Saudi Arabia i.e. the National Company for
Cooperative Insurance which has been operating in the country for a
long time and has gained a lion's share of the market.
Early this month SAMA approved the licenses of 13
insurance companies. The minimum capital specified for granting a
license is SR100 million.
The Kingdom's new regulations are expected to
increase insurance activities as an increasing number of international
companies have evinced interest in operating in the Kingdom. Many
banks have also expressed interest to start new activities related to
The new regulations stipulate that all insurance
companies must be shareholdings offering at least 25 percent of shares
to the public. The size of the insurance market prior to licensing new
firms was evaluated at SR5 billion.
The newly licensed firms have injected an
additional SR2.5 billion in the market. The Mediterranean & Gulf
Insurance & Reinsurance Co. (MedGulf) stands top among the
licensees with the highest capital of SR600 million, followed by BUPA
Arabia (SR400 million), Al-Alamiya Insurance Co., United Cooperative
Assurance Co. and Arabian Shield Insurance Co. (with a capital of
SR200 million each).
Other license winners are: Saudi-Indian Insurance
Company, Tokio Marine & Nichido, Saudi National Insurance Co., AXA
Insurance Company, Saab Takaful Company, Saudi-French Insurance
Company, and National Takaful Co. (all with a capital of SR100 million
Market analysts are, however, afraid of the dual
supervision of insurance firms by the Health Ministry and SAMA which
might be instrumental in increasing value of policies. Leading
companies have officially protested over ministry's supervisory role.
CAPITAL PUNISHMENT: CONVICTS EMBRACED ISLAM
Sri Lanka is seeking clemency for three of its
nationals who have been sentenced to death for carrying out an armed
robbery in a private company in the Kingdom two years ago.
In October last year, four Sri Lankans were
convicted of armed robbery and subsequently on March 10, High Court
Judge Abdul Aziz Al-Musaikri confirmed the verdict pronouncing all
four guilty of armed robbery and sentenced D.D. Ranjith de Silva,
Victor Corea and Sanath Pushpakumara to death and Sangeeth Kumara to
15 years imprisonment.
It was proved that the accused had committed three
robberies, and were caught red-handed while driving a municipal
vehicle as municipal employees. The driver of the vehicle, a
Bangladeshi, who was working for the municipality through a
contracting company, had been shot and injured by the accused.
"We are requesting a pardon on humanitarian
grounds," S. Wijesundara, the charge d'affairs at the Sri Lankan
Embassy, told Arab News. The embassy has also attached the appeals of
the next-of-kin of the convicts, with the plea for clemency.
While in Al-Hair Jail, the four convicts embraced
Islam. "We have also received requests from the next-of-kin of
the accused to make an appeal through a law firm in the Kingdom. We
will be getting the copy of the judgment through the Foreign Ministry
here and the mission will be acting on the advice of the law firm to
seek legal redress," he said.
Meanwhile, the Asian Human Rights Commission (AHRC)
has urged the Sri Lankan government to take urgent action to save the
lives of the three Sri Lankans.
Last week, the Jathika Hela Urumaya (JHU), a
Buddhist political party which has representation in the legislature,
urged the government to intervene immediately to stop the possible
execution of the Sri Lankans.
Making a special statement in Parliament, JHU
member Athuraliye Rathana Thera said the AHRC had given all the
information and the government should act immediately to save the
convicted Sri Lankans.