By  Abdul Halim Ammar 

Insurance has become an imposed requirement in life and is billed as such. There can be no doubt that insurance is a very important requirement for businesses in order to cover the risk associated with commerce from trade and international transactions. As such, finding an entity able to cover such risks becomes a priority for both companies and individuals in the business and private sectors. In order to put both the individual and the business owner at ease, especially during cases of liability and expansion, finding reliable insurance carriers becomes paramount in importance.

With our firm belief that we cannot deal with the entire issue of insurance and include it in one article or topic, but what cannot be realized in whole, cannot be left in its worst estimate.

My focus here is on practical matters and the reality of insurance claims and the jurisdiction entities which are entitled to consider such cases resulting from insurance contracts, according to the legal and lawful scope of insurance practice inside the Kingdom of Saudi Arabia. Specifically, the control regulations of the Cooperative Insurance companies as issued under the Royal Decree No. (M/32), dated in 2/6/1424H, its executive schedule as issued under the Royal Decree No. (M/32), dated in 2/6/1424H, in addition to other regulations concerning certain issues such as Sales & Marketing Ethics Regulations, Risk Management Regulations, Anti-Fraud Regulations, Anti-Money Laundering & Terrorism Funding Regulations, Control Regulations of the Cooperative Insurance companies, in addition but not limited to other various regulations as issued by SAMA ( Saudi Arabian Monetary Agency ).

Firstly and most importantly, there should be special attention given to the Risks Section of any insurance contract (Risks Section – Insurance Installments or Subscription Section – Insurance Amount Section.)
As a general rule, an insurance claim has three parties; the insured (who files a claim based upon occurrence of the insured risk); the insurer, who collects payment in installments for any reason including subrogation claim; and finally the 3rd party, the insurance relation parties due to the insurance contract (the affected entity ; insurance mediator ; the beneficiary .)
Additionally, Article (20), of the Control Regulations of the Cooperative Insurance Companies, assigns the competent entities for considering insurance claims and violations, as follows:- (One committee, or more, is to be formed under a Resolution of the ministers Council, upon recommendations of the Minister of Finance, which is to be of 3 expert members, of which one member, at least, is to be a legal consultant, as this committee is to be entitled to settle disputes between insurers and the insured, or between the insurers themselves in case of subrogation instead of the insured, in addition to settle violations of the licensed Insurance and reinsurance companies to the Control and Supervising instructions, and violations of the free professions practitioners as referred to in Article (18)of such regulation. Employees appointed under a Resolution issued by the Minister of Finance, are to be responsible, and representing the case, before this committee– concerning such violations.

Grievance is allowed against resolutions and decisions of this committee before the Board of Grievance– (Grievance against the committee`s resolutions, before the Board of Grievance, has been amended, under a Royal Decree No. (A /148, dated in 13/12/1431H, by which such powers(specialty) have been transferred to the Appeal Committee of legal consultants specialized in transactions and insurance jurisprudence for considering grievances, submitted by relative parties, against Committee’s resolutions as referred to in Paragraph (1) of the Royal Decree, and whose resolutions are to be irrevocable and Unappealable. (Knowing that this Committee has not been formed yet).
The Secretariat General was formed, according to stipulations of Article (20) of the Cooperation Insurance Regulation, to settle insurance violations and disputes, as it is settled in SAMA, and is formed of 3 members of experts out of three the members, at least, one should t be a legal consultant, and Employees appointed under a Resolution issued by the Minister of Finance, are to be responsible, and representing the case, before this committee. This committee (Preliminary Committee) is concerned with settle disputes between insurers and clients and between insurance companies themselves, in a case of subrogation instead of the insured.
Practically, during filling an insurance claim by me before the Secretariat General, the claim has passed through 3 stages; 1st is the registration of the case; declaration to the defendant of the writ of summons ; receiving all claim documents for parties thereof; reviewing and studying such documents, then filling the case before the Preliminary Committee of Settlement of Insurance Violations and Disputes in order to let all case parties to appear before the Committee and submit their supporting documents, and finally the Committee declares the resolution. In case one party appeals the resolution, this is to be before the Appeal Committee which will be established under the pre-mentioned Royal decree, and whose competencies were explained previously, provided that appeal will be according to the Legal Pleading Regulation that duration allowed for appeal is to be 30 days.
After determining who the individual parties are, we begin preparing all documents associated with the insurance claim, which is to be submitted to the jurisdiction, as follows:-

1. Initiatory Pleading (Declaration), signed and written by the plaintiff, or his attorney, which should contain the following data:-

   – Data of the Plaintiff: – name, Photograph, and address.

   – Data of the Insurance Company: – Name, Registered Office, address, insurance policy number and date of issue.

   – List of Dispute facts, defining requirements of the plaintiff and his actual and lawful supports and evidence.

   – Data of the Defendant : – name and address

   2- Valid Legal Power of Attorney granting powers for performing proceedings in the insurance claim.

   3- Insurance Policy

   4- Evidences & Proofs documents and the supporting documents of the case i.e. views or reports of the competent authorities, experts, Losses Evaluation Companies or Actuarial Expert.

   5- Certified translation of all related non-Arabic documents.
   6- As for, especially subrogation claim, a Subrogation Claim Letter and a POA from the Insured, issued in favor of the Insurer, should be submitted. Knowing that such subrogation letter in subrogation claims in insurance is considered to be the main document to file and accept the claim, as this comes clear when we know that such subrogation letter is a proof of transferring obligations of the insurer towards the insured, according to the insurance policy, concerning claiming against the responsible of the accident. Details can be addressed more thoroughly in subsequent articles.
   After finalizing the preparation of the initial claim and its supporting documents, we will discuss the competent jurisdiction of considering the insurance claims.
   Several entities are competent with considering such insurance claims, due to the mixed nature of the dealings of the various partied previously mentioned the insured, mediator or insurance agent and the insurer. The jurisdiction entity competent of considering insurance claims is to be exclusively the Preliminary Committee and the Appealing Committee of the Secretariat General of Insurance Disputes Settlement Committees, in addition to the jurisdiction of the Board of Grievance in some insurance cases, as stipulated in Article (22) of the Control Regulation of the Cooperative Insurance Companies, especially as in the 1st Clause of this Article , which stipulates to settle all disputed between Insurance Companies and Reinsurance Companies, or even in between each other.

Alternative Methods of Filling Insurance Claims:-
This is to be via Arbitration, which is a special method other than the public method for settling disputes (Judiciary Authorities), as this allows for direct settlement of disputes. It is known that arbitration is called, among legal consultants, (Special Judiciary Court), and this is due to that such judiciary is formed without any Country’s Governmental Powers, although applying such Country’s laws and as such court is presided by arbitrators, not judges.
Advantages of such arbitration come clear, as for insurance claims and in general, in the freedom granted to disputing parties in selecting arbitrators, fast settlement in cases, comparing to ordinary courts and the possibility of an agreement between parties on case confidentiality. The resolution issued by such arbitration has the same legal powers of the ordinary judiciary courts, in a way that makes it not applicable for refilling the case again before other judiciary entity.
Almost, big international companies of huge assets and international trade prefer recourse to such arbitration.
Finally, regarding a very important point in insurance claims; not hearing the insurance claim due to long time (obsolescence).
9th Article, Clause (B) of the Unified Policy of the Mandatory Insurance for Vehicles, which was issued upon the Control Regulation of the Cooperative Insurance companies, stipulates that “the claim of a case, related to such Policy, is not to be filled after 3 years of the accident resulting in the same, or after the same period from notifying the stakeholders parties of such accident, except after proving and verifying of a reasonable and good reason for such delay”.
Although most of the legislations have considered the obsolescence principal, such as Egypt in its Article (752), of the Civil Law (Insurance Contract), which stipulates that all cases, resulting from or related to Insurance Contracts, become null and void after 3 years of the accident causing the case.
Notwithstanding of the obsolescence Principal, practically the Saudi Judiciary and the Arbitration do not consider much such rule.