The Insurance Authority of the Kingdom of Saudi Arabia has warned that offering or selling the ‘Extended Warranty’ product without obtaining the required license constitutes a clear violation of the Cooperative Insurance Companies Control Law.
The warning applies broadly to car dealerships, retailers, and all other commercial entities that promote or provide such products to consumers.
The Insurance Authority emphasized that engaging in any insurance-related activity without proper authorization is a serious breach of regulations designed to protect consumers and ensure market transparency.
Violators may face strict penalties, including fines of up to $533,000 (SAR 2 million) and imprisonment for up to four years, or either of these penalties, in addition to further legal action under applicable laws and regulations.
Only licensed and duly registered insurance companies are permitted to offer extended warranty products within Saudi Arabia, the Insurance Authority clarified. This requirement is part of a broader regulatory framework aimed at maintaining fairness, accountability, and professionalism within the insurance sector.
The Insurance Authority revealed that it has recently detected multiple violations involving the unauthorized offering and sale of extended warranties. These findings are part of its ongoing coordination with relevant government bodies to monitor compliance and enforce insurance sector rules and instructions. Several retailers and car dealerships were identified as providing these products without securing the necessary license from the Insurance Authority.
Reaffirming its commitment to regulatory oversight, the Insurance Authority called on all commercial entities to strictly adhere to the rules and guidelines governing insurance activities.
It further encouraged individuals and businesses to report any suspected violations through its officially approved communication channels, stressing the importance of public cooperation in strengthening compliance and safeguarding consumer rights.
