Onshore Energy Conference — Dubai Onshore Energy Conference — Dubai 02 | Page 27

TRANSLATION ISSUES the question that must be asked is whether the use of international market wordings does in fact result in greater certainty in the context of KSA insurance, or is a new approach required? This article considers some of the issues that are relevant to this question and, although focused on KSA, it is of broader relevance as similar issues arise throughout most of the jurisdictions in the Middle East. T he insurance industry has long sought contract certainty through the development of standard market wordings. The underwriting of large non-personal lines risks in the Kingdom of Saudi Arabia (KSA) is no different as various well-known market wordings, particularly London market wordings, are commonly used. The lack of local wordings can be understood as the KSA insurance market is still heavily reliant on foreign reinsurance support, and foreign reinsurers naturally wish to underwrite on the basis of familiar wordings. However, The direct impact of the KSA regulatory regime KSA’s insurance regulator, the Saudi Arabian Monetary Authority (SAMA), has enacted various instructions and regulations that have a direct general impact on insurance. There are also SAMA regulations that apply to specific lines of business (as defined and identified by the regulations). Notwithstanding the existence of specific regulations, in our experience, a number of the regulations that impact directly on the onshore energy insurance business are not particularly well-known such as, say, the September 2016 circular in relation to “Engineering Insurance” (the Engineering Insurance Guidance). 27