On 17 December 2018 (10 Rabi Al Akhar 1440H), the Saudi Monetary Authority issued new rules allowing foreign insurance and reinsurance companies to establish branches in the kingdom.



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Rules for Licensing and Supervision of Branches of Foreign Insurance and/or Reinsurance Companies in Saudi Arabia. Saudi Arabian Monetary Authority. 17 December 2018. Arabic and English. Available at

Inception date: 18 Dec 2018 | Removal date: open ended

FDI: Entry and ownership rule

On 17 December 2018 (10 Rabi Al Akhar 1440H), the Saudi Monetary Authority (SAMA) issued Decision no. 18/440, which set new licensing and supervision rules allowing foreign insurance and reinsurance companies to establish and operate a branch in the Kingdom. 

SAMA stipulates in the new decree the following: 

  • licenses will not be granted to foreign (re)insurer to open a branch without confirmation from the home supervisory authority that the applicant is currently licensed to carry out the same proposed line of insurance business in its home jurisdiction, and has been writing the same line of business for the past three years;
  • The applicant has to confirm that the paid-up capital of the applicant is equal to, or more than, the amount required for a Saudi established (re)insurance company;
  • Any company, prior to commencing branch operations in Saudi Arabia, shall place its capital contribution with the branch, that is a minimum of SAR100 million (USD 26.7 million) for insurance and SAR200m for reinsurance;
  • The branch establishes appropriate management and accounting procedures in Saudi Arabia similar to what is required of local companies, and to the extent applicable to the branch's nature, which will enable the preparation of its accounts concerning its business carried out in Saudi Arabia, in addition to keeping all necessary records for this business within Saudi Arabia;
  • The foreign insurer shall form a committee of at least three members, after they get SAMA’s prior non-objection to their appointments, to oversee the branch business. This committee shall be treated the same as a board of directors in a local (re)insurance company with regard to its responsibilities and obligations, and it shall annually hold a number of meetings in Saudi Arabia in a manner that is similar to that of a local company’s board of directors;
  • A general manager of the branch, who is resident in Saudi Arabia, is appointed and authorized to act on behalf of the applicant;
  • All senior managerial roles in the branch are occupied by designated individuals resident in Saudi Arabia and approved by SAMA.
  • The applicant has to furnish an irrevocable bank guarantee of SAR100 million (USD 26.7 million) for the branch, a summary of the reinsurance arrangements for the activities to be carried out, the applicant's financial statements for the last three years and the classification of the applicant for the last three years from a global credit rating company
  • The management of the invested assets of the branch shall be through the investment department of the branch or through a licensed Saudi bank.

SAMA has declared in a news release that this decision aims "at developing the industry while ensuring the stability and resilience of the financial systems." It is also notably a part of Saudi Vision 2030 for creating a thriving and sustainable economy.