Obligation to separate insurance and reinsurance brokerage activities in Saudi Arabia

By 2021, the combination of insurance and reinsurance brokerage activities will be prohibited in Saudi Arabia. The local legislation requires the creation of separate companies for any brokerage entity aiming to operate in direct insurance and reinsurance.

Brokers currently active in both activities have three months to submit their restructuring plans to the market regulator (SAMA). They shall then be required to comply with the law within one year. According to the SAMA the new rules will help to reduce the malpractices currently prevalent in the market.

Read also | Regulation of online brokerage activity in Saudi Arabia