The Central Bank of the UAE signed a preliminary agreement with the Saudi Central Bank, better known as Sama, to establish a general framework for the supervision of the insurance sector in both countries.
As part of the agreement, the two countries will exchange supervisory and regulatory information related to solvency rules, the calculation of technical allocations, investment policy rules, and procedures related to supervision, follow-up, and enforcement of regulations on insurance companies, including cross-border companies, the UAE central bank said on Tuesday.
The UAE and Saudi Arabia will also exchange information related to suspicious activities, fraud in the insurance sector, money laundering and terrorist financing.
“The [agreement] would improve the performance of the financial sector supervision system, investment growth and trade co-operation, as well as promote economic partnership relations between the two countries,” Khaled Mohamed Balama, governor of the CBUAE, said.
The UAE and Saudi Arabia, the Arab world’s two biggest economies, have strong trade and economic ties. Saudi Arabia is one of the top three trading partners of the UAE with bilateral non-oil trade between the two countries reaching Dh32.5 billion ($8.84bn) in the first quarter of 2022, according to data from the Emirates’ Federal Competitiveness and Statistics Centre.
The UAE is also one of the top 10 destinations for Saudi Arabia’s non-oil exports, data from the General Authority for Statistics for the second-quarter shows.
“Sama looks forward to working … with the Central Bank of the UAE for strengthening of the integrated economic system between the two countries in the field of insurance, and to enhance the economic structure in support of the growth and prosperity of the insurance sector in both countries,” Fahad Al Mubarak, governor of Sama, said.
The UAE central bank and Sama will also co-operate on the implementation of international standards in their markets, particularly the International Financial Reporting Standard as well as standards and recommendations issued by the International Association of Insurance Supervisors and the Islamic Financial Services Board, the UAE bank said.