The Saudi Arabian Monetary Authority (SAMA) issued on 17 November 2012 the outsourcing regulation for insurance and reinsurance companies and insurance services providers (the Regulations) operating in the Kingdom of Saudi Arabia (KSA). The regulations are progressive by regional standards, allowing outsourcing to entities outside of KSA, but will need to be carefully considered by insurance sector players. This is not least because the regulations apply equally to functions performed by group entities as well as third parties.
The Regulations require that outsourcing arrangements should be recorded in a legally binding contract. The contract must comply with Saudi law and contain specific details provided by the Regulations, including service levels and performance standards and data protection provisions. The contract should be governed by Saudi law and subject to the jurisdiction of the Saudi courts (unless otherwise approved by SAMA). In addition, it is necessary for an
