Surplus Distribution Registration

Surplus Distribution

Surplus Distribution Overview

The insurance surplus is the process of sharing the subscription and investment income between the insurance operators and the participants in the insurance base, at the end of the policy based on the agreed upon percentage of participation. According to Article 70 (2 e) of the Executive Regulations of the Law on Supervision of Takaful Insurance Companies from the Central Bank of Saudi Arabia, insurance companies are required to distribute 10% of the net surplus from insurance operations to policyholders.

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What is insurance surplus?

The insurance surplus is the remaining balance in the Participants’ Fund from the total contributions, investment returns, and any other receivables, after deducting the company’s management fees, settling accepted insurance claims, paying reinsurance premiums, paying any fees due to other parties, and allocating any reserves related to the Participants’ Fund.

How can I be eligible to receive the Insurance Surplus?

According to the Insurance Operations Surplus Distribution Policy issued by the Saudi Central Bank (SAMA), eligibility for the insurance surplus requires that the total incurred claims amount is less than 70% of the total earned premiums.

How will the surplus be distributed?

Eligible participants may choose to receive their share of the surplus through a bank transfer to their bank accounts, request to deduct the entitled amount from the renewal contribution, or authorize the company to donate their entitlement to licensed charitable organizations selected by the participant through written authorization.

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