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RIYADH: The Saudi Central Bank has signed an initial agreement with its UAE equivalent to create a framework for cooperation in the field of supervision and control of insurance in both countries. 

The institutions have agreed on joint work in the field of training and exchange of supervisory expertise, in addition to cooperating on the exchange of supervisory and regulatory information related to the insurance sector.

This includes information on rules of solvency, how to calculate technical provisions, investment policy rules, as well as procedures related to supervision, follow-up and enforcement on companies operating in the sector.

The memorandum of understanding also provides for the exchange of information related to suspicious activities, fraud in the insurance sector, money laundering and terrorist financing.

The MoU was signed on the sidelines of the 46th ordinary meeting of the Council of Governors of Arab Central Banks and Monetary Institutions, which was held in Jeddah, according to the Saudi Press Agency. 

It came following a recently concluded agreement between both countries, that aimed at strengthening cooperation in the field of services and financial markets.

Both central banks will also cooperate on the implementation of international standards in their markets, particularly the International Financial Reporting Standards.

In addition to the standards issued by the International Association of Insurance Supervisors and the Islamic Financial Services Board. 

In July, the Saudi Central Bank, also known as SAMA, issued the standard insurance policy of professional indemnity for auditors of the entities supervised by the Capital Market Authority.

In cooperation with the CMA, the standard policy was issued in a bid to promote the concept of sustainability and reduce potential risks in the financial market, according to the central bank’s statement.

This was done in addition to setting the minimum acceptable standard that must be met within a professional indemnity insurance policy and protecting the rights of the entire parties to the contractual relationship. 

The policy covers indemnity for all the amounts the insured is legally liable to pay to others, due to any professional failure committed while providing professional services within the Kingdom.

This comes as part of the central bank’s efforts to improve financial services.