RIYADH – Saudi Arabian Monetary Agency (SAMA) has barred for at least one month the Arabian Shield Cooperative Insurance Company from issuing insurance policies for new vehicles. The prohibition is effective today (Jan. 9), Saudi Press Agency (SPA) quoted SAMA as announcing Sunday.
SAMA said the prohibition was the company’s non-full compliance with the regulatory requirements related to settling claims for vehicle insurance. Furthermore, it has not addressed clients’ complaints, despite constant monitoring by SAMA.
The measure is in implementation of article 19 of the regulation on monitoring cooperative insurance companies, issued according to a royal decree dated July 31, 2003, the agency said.
SAMA stressed that it will not lift the sanction unless the company proves that it has rectified its status and has complied with the criteria and conditions that guarantee clients’ rights and those of insurance beneficiaries.
The decision to bar the company from issuing new vehicle insurance policies should not exempt it from fulfilling its commitments stipulated by valid insurance policies and claims resulting from them.
If the company does not rectify its status, SAMA will take additional punitive measures against it.
SAMA’s decision comes within its keenness to protect the rights of those covered by insurance and those benefiting from insurance coverage. The objective is also to prevent any illegal practices in the insurance sector. — SG