On 25 March 2026, the KSA Insurance Authority (“IA”) has announced on its website, the approval of the Licensing Requirements for Underwriting Activities, as part of its continued efforts to strengthen the regulatory framework of the insurance sector, enhance governance standards, and improve the quality and efficiency of professional practices across the market. This follows the earlier publication of the draft framework on the Istitlaa public consultation platform, where stakeholders were invited to provide feedback prior to finalisation.
Core Requirements
- Entities intending to carry out underwriting activities must obtain a license from the IA prior to commencing operations.
- Applicants must establish and maintain a registered office within the Kingdom of Saudi Arabia.
- A minimum capital requirement of SAR 1,000,000 applies.
- Licensed entities must maintain professional liability insurance coverage of no less than SAR 3,000,000.
- Applicants are required to employ qualified professionals with relevant underwriting expertise.
- Entities must implement appropriate governance, compliance, and risk management frameworks.
- A clear organizational structure and detailed business plan must be submitted as part of the licensing process.
What has changed
Like many other jurisdictions, underwriting was seen as a core activity for the risk bearer, being insurer or reinsurer, but the new regime will allow standalone MGAs to be established in KSA, who are considered delegated underwriters. This is unique as the only other jurisdictions in the region that recognizes MGAs are DIFC and ADGM, which are financial centers, considered as reinsurance hubs.
Next Steps
The final regulation relating to this new regime has not yet been published in public domain, as at the time of this article, and once issued, those who are in the KSA market and others who are interested to operate must start analyzing the requirements to understand the feasibility of this new insurance licensing category. Some key considerations remain unanswered in the absence of the regulatory guidance, such as whether these MGAs have any ownership restriction, and how would the underwriting through these MGAs classify with respect to the compulsory reinsurance cession that has now come into play in the KSA market.
How Al Tamimi can help?
Early preparation will be key, as the IA is expected to begin accepting license applications in the near term. This includes reviewing capital adequacy, governance frameworks, staffing qualifications, and insurance coverage arrangements. Please contact Anand Singh, Senior Counsel at a.singh@tamimi.com and Di Melody Huang, Associate at d.huang@tamimi.com if you would like to discuss how this development affects your business.
Key Contacts
Anand Singh, Legal Director, a.singh@tamimi.com
Melody Huang, Associate, d.huang@tamimi.com.
Saeed AlBarghouthi, Trainee Lawyer, S.AlBarghouthi@tamimi.com