The Council of Cooperative Health Insurance has defined the merger and acquisition policy for health insurance companies and the statutory requirements for carrying out this procedure.
The Council also clarified the mechanism of exemption from the financial compensation for companies resulting from acquisition and merger, and the requirements that must be met for the continuation of the exemption.
Requirements for applying for qualification of the company resulting from the merger or acquisition
It is possible to apply for a new qualification for the company resulting from the merger or acquisition, and this requires uploading all the documents required for the qualification requirements, and submitting a copy of all external merger requirements, including the written approval of the Central Bank, the approval of the Competition Authority, and the new commercial registration number.
A post-merger plan must also be submitted to this company, including insurance policies, a commitment to manage the existing documents, and financial obligations such as procedures to ensure payment of financial dues to health service providers within 45 days from the date of their claim.
The value of the financial consideration for qualifying insurance companies
The Council shall officially rehabilitate the insurance company to practice health insurance activity in the Kingdom, as it is not allowed to engage in insurance business unless it has been qualified by the Council. 50,000 riyals for one year, provided that the council decides on qualification requests within 90 days from the date of submitting the request.
The Council also supervises the work of insurance companies to implement the system, and the Council receives a financial consideration for supervision at the rate of 1% of the total written health insurance premiums received by qualified insurance companies according to the audited financial statements.
Exemption from the fee
The policy set by the Board stipulated that the company resulting from the merger or acquisition has the right to request exemption from the financial consideration for qualification for a maximum period of 3 years from the date of the merger or acquisition, or to request exemption from the financial compensation for supervision on an annual basis. day, with performance indicators related to data quality and customer service being measured.
Conditions for exemption from financial consideration
The company resulting from the merger or acquisition can obtain financial exemption provided that this acquisition or merger was between a medium company with a medium company, a small company with a small company, or a medium company with a small company or vice versa.
It also stipulated the resolution of all outstanding complaints of the two companies, and their commitment to fulfill the policyholders’ medical claims until the expiry of the valid documents, in addition to not asking them for the amounts of financial compensation for rehabilitation and supervision previously paid to the Council.
The company also has the right to apply for an extension of the exemption from the financial consideration for supervision fees, provided that the extension request is 60 days before the expiry of the previous exemption, and to submit a report on performance indicators.
Board duties regarding acquisition and merger
The Board has defined the tasks required of its departments regarding the implementation of the acquisition and merger policy, and this policy and procedure will be effective from the date of its approval, provided that it is reviewed every three years or whenever the need arises.
