Saudi Enaya banned from issuing, renewing insurance policies

Saudi Arabian Monetary Authority (SAMA) has banned Saudi Enaya Cooperative Insurance Co. (Saudi Enaya) from issuing new insurance policies or renewing outstanding ones, as of May 27.

The regulator has directed the insurer to meet solvency requirements, after its accumulated losses reached 74.5 percent of capital by the end of Q1 2018, or SAR 149 million.

Meanwhile, SAMA has ordered Saudi Enaya to appoint a financial advisor to set up a corrective plan, and submit a weekly report on the related developments.

If the company fails to take action to resolve the issue, SAMA will resort to stricter actions to protect the rights of the insured.

Saudi Enaya said it expects a related negative financial impact and will take the necessary measures to comply with regulatory requirements.

Earlier this month, the Capital Market Authority (CMA) approved Saudi Enaya’s request to reduce capital by 50 percent to SAR 100 million from SAR 200 million, to cut losses.

The company’s shareholders are set to vote on the capital cut in the EGM scheduled for June 10.