Only licensed and duly registered insurance companies may offer extended warranty in Saudi Arabia, the Insurance Authority has said in a statement.
Offering or selling the "Extended Warranty" product without the required licence is a clear violation of the Cooperative Insurance Companies Control Law, the regulator asserted. The warning applies to car dealerships, retailers and all other entities that offer the warranty.
The Insurance Authority said it had detected violations in the offering and sale of extended warranty as part of its ongoing work with relevant authorities to monitor compliance with insurance sector rules and instructions. It said a number of retailers and car dealerships were found offering the product without a licence from the Insurance Authority.
The Insurance Authority’s statement echoed a circular issued last October by the Ministry of Commerce, which warned retailers, car dealerships, and all entities against offering "extended warranty" products without obtaining a licence from the Insurance Authority.