Al-Sabil proposes system to lower insurance defaults through mergers
The Council of Ministers has approved a new system aimed at reducing the insolvency of insurance companies by encouraging mergers and consolidations between financially strong companies and those at financial risk. This effort is part of supporting the protection of policyholders' rights and maintaining sector confidence. The system seeks to shift from a model of reactive insolvency treatment to a preventive approach that regulates merger processes, offering benefits such as reductions or exemptions from contributions by the merging companies to the Policyholders' Guarantee Fund, thereby enhancing the financial resource management efficiency of the fund. This direction aims to minimize the liquidation of insurance companies and improve market stability.
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