Cooperative Health Insurance Act


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This is a tentative interpretation

For official use, please refer to original text in Arabic

Cooperative Health Insurance Act

Article 1:

This act aims to regulate the provision of health care for non-Saudi residents in the Kingdom. It may be applied to Saudi Citizens and others by a cabinet decree.

Article 2:

The coverage of cooperative health insurance shall include all those subject to this act and their dependents as specified in para (B) Article 5.

Article 3:

With respect to the implementation phases specified in para (B) Article 5, Article 12 and article 13 of this act, anyone sponsoring a resident shall be obliged to participate in the cooperative health insurance for the benefit of the resident.

Residence permit shall not be issued nor renewed without prior obtaining the cooperative health insurance policy. The period covering the residence permit (Iqama) must be equivalent to the policy period..

Article 4:

A council for health insurance shall be established and to be chaired by the Minister of Health and the membership of :

a. A representative Deputy Minister level- nominated by each of the following ministries: the Ministry of Interior~ the Ministry of Health, the Ministry of Labour & Social Affairs, the Ministry of Finance & National Economy and the Ministry of Commerce.

b. A representative for the Council of Saudi Chambers of Commerce & Industry nominated by the Minister of Commerce, and a representative for the cooperative insurance companies nominated by the Minister of Finance & National Economy in consultation with the Minister of Commerce.

c. A representative for the private health sector and two representatives for other - governmental health sectors shall be nominated by the Minister of Health in coordination with their respective sectors. -

The Council members shall be appointed by a cabinet decree for three years (renewable).


Article 5:

The health insurance council shall regulate the implementation of this act and in particular : A. Preparing a draft of an executive bylaw for this act.

B. Insuing necessary decisions for regulating changing matters regarding the implementation of the rules governing this act, including implementation phases, the family members of the beneficiary to be covered by this insurance, the way and percentage of contribution by the beneficiary and the employer in the cooperative health insurance and the maximum limit for this amount based on actuarial and specialist study.

C. Qualifying the cooperative insurance companies to work in the field of the cooperative health insurance.

D. Accrediting the health institutions to provide cooperative health insurance services. E. Determining the financial compensation for qualifying the cooperative health

insurance companies to work in this field, and the financial compensation for the accreditation of health institutions to provide cooperative health insurance services, after consulting the ministry of fu1ance and national economy.

F. Issuing the financial bylaws for the revenues and expenditure of the health insurance council, including. employees salaries and remuneration after consulting the ministry of finance and national economy.

G. Issuing the internal bylaws of the council.

H. Appointing secretary general for the council based on a nomination by the minister of health, and formation of secretariat general and defining its duties.

Article 6:

The necessary expenses for the performance of the health insurance council covering its activities, salaries of employees and their remuneration shall be paid from the revenues collected as specified in para (E) article (5) and as agreed upon between the Ministry of Health and the Ministry of Finance and National Economy.

Article 7:

The cooperative health insurance policy covers the following basic health services: a. Medical examination, treatment in clinics and medication.

b. Preventive procedures such as vaccination, motherhood and childhood care. c. Required laboratory- and radiological examinations.-

d. Inpatient care (Accommodation & treatment) including delivery and operations. e. Treatment of teeth and priodental diseases excluding orthdontics and dentures.

These services shall not prejudice the requirements of the social insurance regulations nor with health services offered by private companies, institutions and individuals to their employees in excess of those provided by this act.


Article 8:

The employer may extend the scope of the cooperative health insurance services through at additional annexes at additional cost to include more curative and diagnostic services than what was specified in the previous article.

Article 9:

The preventive health procedures for those covered by the insurance including examinations, vaccination and in the period prior to issuance of the cooperative health insurance policy shall be made by a decree issued by the Minister of Health.

Article 10:

The employer shall bear the medical treatment costs if the beneficiary needs a medical treatment before the date of participation in the cooperative health insurance.

Article 11:

a. Governmental" health facilities may -when needed- provide the health services included in the cooperative health insurance policy to the policy holder for a financial compensation to be borne by the health insurance company.

The health insurance council shall determine these facilities and the financial compensation for such services. .

b. The minister of health in agreement with the minister of finance and national. economy shall define - procedures and rules for collecting the financial compensation stipulated in the previous paragraph.

Article 12:

The medical treatment of personnel working for government institutions and who are covered by this act as well as their family members shall take place in the governmental health facilities if they are directly contracted and sponsored by these institutions and when their contracts state their right for treatment.

Article 13:

The health insurance council may issue a decree exempting institutions and companies, which own a qualified private medical facilities from participating in the cooperative health insurance for the services offered by these facilities to their members.

Article 14:

a. If an employer fails to subscribe or pay the premiums of the cooperative health insurance for his employee covered together with his dependants in the cooperative health insurance policy, the employer shall be obliged to pay all premiums due, in addition to a financial fine not exceeding the annual


contribution of each individual. He may also be deprived of the right to recruit expatriots permanently or temporarily.

In such case, the executive bylaws will determine the authority to whom due premiums shall be paid.

b. In case any of the cooperative insurance companies fails to fulfil its obligations as defined in the cooperative health insurance policy, it shall be obliged to fulfil its commitment and to compensate for its violations.

In addition to a [me not exceeding SR five thousand for each individual covered in the policy being the subject of such violation.

c. One committee or more shall be formed by a decree from the chairman of the health insurance council, and to be represented of the :

1. Ministry of interior

2. Ministry of labor and social affairs 3. Ministry of justice

4. Ministry of finance and national economy 5. Ministry of health

6. Ministry of Commerce

This committee shall be entrusted with the violations of this act and proposing appropriate penalty, this penalty shall be imposed by a decree from the chairman of the cooperative health insurance council. The executive bylaws shall define this committee. Complaint of such decree may be submitted to the bureau of grievances within 60 days from notification.

Article 15:

The non-Saudi resident not intiteled by a sponsorship, shall take the place of the employer in fulfilling all obligations stated in this act.

Article 16:

The ministry of health shall be entrusted to monitor the quality assurance of the health services provided to the beneficiaries of the cooperative health insurance.

Article 17:

The cooperative health insurance shall be implemented by qualified Saudi cooperative insurance companies applying the cooperative insurance manner, similar to that stated for the national company for cooperative insurance, and in compliance with what is stated in the decree of the senior olama board No. (51) dated 4.4. 1497H.

Article 18:

The minister of health shall issue the executive bylaws for this act within a maximum period of one year from date of its issuance.

Article 19:

This act shall be published in the official gazette and shall be effective after 90 days from issuance of the executive bylaws. The rules related to the establishment of a health insurance council and to the scope of competence shall be effective from the date of publication of the act.


Kingdom of Saudi Arabia

Cooperative Health Insurance Council

Secretariat General

In the Name of God Most Gracious Most



Rules of Implementation


The Cooperative Health Insurance System


The Cooperative Health Insurance Policy

Issued by Minister of Health Resolution No.


Rules of Implementation


The Cooperative Health Insurance System


The Kingdom of Saudi Arabia


Subject Page


Chapter one: Definitions 2

Chapter two: Beneficiaries 4

Chapter three: The System’s Insurance Coverage 6

Chapter four: Benefits 8

Chapter Five: Financing Insurance Companies 11 Chapter six: Practicing Health Insurance Business 12 Chapter seven: Supervision on Insurance parties 17 Chapter eight: Relationship between Insurance Parties 21 Chapter nine: Quality Assurance of Services Provided 29 Chapter ten: Penalties & Settlement of Disputes 30 Chapter eleven: Transitional Provisions & Enforcement

of the Rules of Implementation


Rules of Implementation


The Cooperative Health Insurance System


The Kingdom of Saudi Arabia

Chapter one: Definitions

Article 1: The following terms shall have the meanings shown alongside each of


1- The System: The Cooperative Health Insurance System in the Kingdom of

Saudi Arabia.

2- Council: The Cooperative Health Insurance Council established under the

provisions of Article four of the system.

3- Secretariat 'General: The Executive staff of the council

4- The supervisory body: The .Cooperative Health Insurance Council as well

as other bodies designated by the state to supervise the insurance activities.

5- Social Insurance: Insurance applicable under the Social Insurance

Regulations implemented by the General Organizations for the Social Insurance.

6- Employer: Natural or legal person employing one labourer or more. 7 - Policy Holder: Natural or legal person to whom the policy is issued.


Dependent: The husband, wives, male sons under the age of eighteen


9- Insurance Company: The Insurance Company licensed to operate in the Kingdom prequalified by the council to practice cooperative health insurance business.

10- The Insured (Beneficiary) : The person covered by the System and is insured by an insurance company.

11- Health Insurance: The Cooperative Health Insurance indicated in the System. 12- Emergency: The Medical 1Teatment required by the beneficiary following

an accident or an emergency requiring quick medical intervention.

13- Insurance Coverage: The basic health benefits available to the beneficiary set forth in the insurance policy attached to these rules.

14- Policy: The original cooperative Health Insurance Policy approved by the Council and attached to these rules, including designations, benefits and exceptions. Policy is issued by the insurance company based on an application submitted by the employer (policy holder).

15- Premium (contribution) : The amount payable to' the company by policy holder in return for the insurance coverage provided by the policy during the insurance period.

16- Percentage of deduction / portability (contribution in payment): The portion payable (as fixed in the policy schedule) which should be paid by the beneficiary (the insured) when visiting the physician for treatment.

17 - Benefit: Shall mean the cost of providing health service falling under the insurance coverage within the limits shown in the policy Schedule.

18- Service Provider: The person or health facility approved and licensed - under the regulations in force - to provide health

Services in the Kingdom such as; a hospital, a diagnostic center or clinic, a pharmacy, a lab, a physiotherapy or radiotherapy center.


The health service providers group approved by the Cooperative Health Insurance Council and designated by the Health Insurance Company to provide service to employer / policy holder, by directly debiting the account of the Insurance Company. This network shall fall within the following health care categories:-

- First category for providing health services (primary health care) - Second category for providing health services (General hospitals).

- Third category for providing health services (specialist or referral hospitals).


Chapter two: The Beneficiaries (the insured)

Article 2: The following categories shall subject to the health insurance


1- All non-Saudi persons working for a wage for other persons or for their own account irrespective of their income, nature of work and term of employment.

2- All non-Saudi persons other than those working and residing in the Kingdom. 3- Members of the family who are in position of a residence pennit in the

Kingdom and are supported by the persons specified in para (1) and para (2) of this article.

Article 3: The following are exempted from health insurance provided for in

article (2) of these rules:

1- All non-Saudi employees working for governmental bodies & corporations whose by-laws don't allow them to conclude contracts with private hospitals for the treatment of their employees so long as such employees are under- the sponsorship of such bodies and have signed employment contracts with them, provided that such contracts provide for medical treatment at a government hospital. Those employees whose employment contracts don't provide health service shall obtain a private insurance coverage to meet these basic health requirements.

2- All non-Saudi employees working for the private sector under employment contracts stipulating the providing of medical treatment in prequalified health facilities belonging to the -employer. If treatment becomes impossible at these facilities owned by the employer - including emergencies - the employer shall provide supplementary insurance coverage.

3- Members of the family who are supported by the employees specified in para (1) and para (2) of this article.


The scope of treatment set forth in the above paragraphs shall be in compliance with the provisions of article (7) of the system as a minimum requirement and shall conform to- quality standards set forth in threes rules.

Article 4: The Council shall - in accordance with article (3) of these regulations

- designate the following:--

1- Governmental bodies and agencies

2- Employers' who employ persons exempted from health insurance, based on applications submitted by them.

The Council shall decide the extent of conformity of medical treatment provided by such governmental bodies and agencies and employers with the scope and standard of health services that must be available under these rules.

3- In cases where the provisions of article (3) are not definitely valid in respect of any employees or dependents, the Council shall take a proper decision in this regard based on an application to be submitted by the employer.

4- The justifications requiring the elimination of exceptions from the provisions of para (2) of this article. In this case employees and dependents shall subject to this system within the above designation.


Chapter three: The System's Insurance Coverage

Article 5 : A- Employer shall conclude a health insurance policy with one of the

insurance companies to cover beneficiaries existing in the Kingdom or any new: beneficiaries who become subject to this system.

B- Prequalified insurance companies will not be allowed to reject any application for cooperative health insurance as long as they are solvent.

Article 6: Insurance company shall issue. a certificate to the employer (policy

holder), stating that his personnel .have been insured, for submission to the.. authority in charge of issue and renewal of Iqamas. Council shall lay down the contents of the certificate.

Article 7: If the beneficiary is not granted Iqama, his name shall be deleted from

the cooperative health insurance policy as from date of his final departure and the premium due for the remained insurance period shall be calculated in accordance with the basis set forth in the policy.

Article 8: Beneficiary shall be given a copy of the insurance policy, the health

coverage of which shall not be less than the basic coverage period stipulated in the System.

Article 9: Employer may change the insurance company contracted for

providing insurance coverage provided that he shall forward a letter in this respect to the insurance company one month at least before date of termination. The portion of the insurance premium returned shall be calculated on a proportionate basis, Employer (policy holder) shall return insurance cards upon of termination and shall sign another insurance policy for providing insurance coverage. The new policy shall commence as from the day following the termination of the previous policy.


Article 10: When a person, who is subject to cooperative health insurance,

moves to work for another employer, the new employer shall get him insured as from date of transfer and shall submit the insurance certificate as a requirement for transfer of sponsorship.

Article 11: The coverage of the health insurance shall include the benefits set

forth in article (7) of the system and the provisions of chapter four of these rules. Policy shall specify the period of time needed for treatment, the maximum amount of the insurance coverage, the limitations, benefits, exceptions and the general conditions of the insurance coverage.

Article 12: The insurance coverage benefits shall include pregnancy and

childbirth for those whose contracts are concluded on married status, within the limits set out in the policy.

Article 13: The health insurance coverage is limited to the services provided in

the Kingdom of Saudi Arabia by the approved service providers network having signed health service contracts with the insurance company. .

Article 14: Employer shall get the beneficiary covered by insurance from date of

his arrival in the Kingdom. He shall hand the beneficiary the insurance card within a period not exceeding ten working days from the date of his arrival. Newly born children horn in the Kingdom of Saudi Arabia during the 'validity of the policy will be 'covered by insurance retrospectively starting from date of birth.

Article 15: The insurance coverage expires with the death of the beneficiary, the

expiry of the policy, termination thereof- or upon the beneficiary’s departure of the Kingdom for good.


Chapter Four: Benefits: (Benefits in kind and Refund of Cost)

Article 16: Beneficiary shall be entitled to the benefits specified in the policy as


1- Diagnosis and treatment provided by the service provider.


portability amount shall be borne by the beneficiary as

shown in the

policy i.e. the amounts in excess of the coverage limit.

2- The amounts representing the cost of the necessary medical and emergency treatment if the beneficiary has to bear such costs directly provided that the insurance company is unable to make such services available immediately to the beneficiary or in the event of refusal by the insurance company to provide such services without a valid reason. The refund of cost to those who incur treatment expenses shall be in accordance with the limits set forth in the policy and to those paid by the company to a service provider of similar standard.

Article 17: The right to claim benefits shall commence on the effective date of

insurance coverage in accordance with the provisions of article (14) of these rules.

Article 18 : There shall be no waiting periods without the right to benefits at the

start of insurance, this includes providing benefits after the commencement of the insurance coverage 'to cases dating back to a period preceding the effective date of coverage. If the

beneficiary has come to

the Kingdom for treatment and not for

work, the insurance coverage

shall not extend to the cases preceding the effective- date of insurance coverage.

Article 19: The entitlement to benefits shall terminate with the termination of

the insurance coverage according to the provisions of article (15) of these rules, This shall include undecided


insurance cases. The decisive. factor for the commitment of the insurance .company to service is the date of providing such service by the service provider.

Article 20: The insurance benefits shall cover basic baby inoculations and

vaccinations upto school age which, a contracted service provider must provide in accordance with the resolutions of the Ministry of Health.

Article 21: Health Services and Medical treatment shall be provided by the

service providers network listed in the schedule attached to the insurance policy which shall be delivered to the 'beneficiaries and approved both by the insurance company and the policy holder.

Article 22: The insurance coverage shall include the stay and cost of food in

hospitals for one person escorting the beneficiary such as, the accompanying of the mother of her child (upto age twelve) or when medical requirements necessitate such escort according to the sole discretion of the treating physician.

Article 23: In emergency cases only, the cost of transport of beneficiaries such

as, patients or pregnant women to the nearest facility for treatment shall be covered. Transport shall be by ambulances licensed or belonging to the Saudi Red Crescent Association.

Article 24: Every beneficiary benefiting from medical' services shall contribute

in the payment of cost of treatment at service centers as shown in the policy with the exception of emergency and hospitalization cases.

Article 25: Medical service provider may not waive the contribution amount by

adding such amount to the final sum to be paid by the insurance company or by offering it as a discount to the beneficiary.


Article 26: The contribution in payment to tl1e health service provider by tl1e

beneficiary must be made against a receipt.

Article 27: Beneficiaries may not claim benefits under the policy unless such

benefits are basically covered as stipulated in the policy or in as stated in the additional coverage tl1ey have obtained under article eight of the cooperative health insurance system.

Article 28: No demand for health services shall be raised in case of illness, if

such services were provided following an accident in the place of work or during the break out of occupational diseases within the definition set forth, in the Social Insurance Regulations.

Article 29: If the insurance company is providing such health services and it was

found out that the Occupational Hazards Branch of GOS1 must cover such services, GOSI shall indemnify the insurance company for expanses incurred.

Article 30: If GOSI provides health services to a person who has an insurance

contract with a health insurance company despite the fact. that the latter shall be obligated to provide such services, the insurance company shall compensate GOSI for the expenses incurred. Compensation shall be within the limits of services the insurance company is committed to provide to those non covered by social insurance regulations.

Article 31: GOS1 and the Insurance Company may conclude mutually a contract

providing for taking certain measures to Tender the services set forth in articles (29) and (30).

Article 32: If a beneficiary has any claims against a third party relating ~ to

indemnities for damages resulting from a disease or an accident the dues and rights of the beneficiaries "- shall be transferred to the insurance company including costs incurred by the insurance company as a result of providing health services to the beneficiary.


Chapter five: Financing the Insurance Companies

Article 33: Premiums and additional fees being collected and investment returns

shall be listed in the insurance companies revenues.

Article 34: Every insurance company shall comply with the resolutions adopted

by the Council in coordination with other supervisory bodies to provide technical allocations generally accepted in the insurance sector.

Article 35: A- The insurance premium (contribution) shall be fixed by

agreement between the insurance company and the employer.

B- If premium value is different from that stated in the work plan of the company, the latter shall seek the approval of the Secretariat

General of the Council en the premiums value and the Council may review the premium from time to time.

C- The maximum benefit limit for every beneficiary shall be SR two hundre4 fifty thousand only.

Article 36: Employer shall pay the premiums on behalf of his (contracted)

employees and their dependents to the insurance company he selects for this purpose. This applies to persons not working or their dependents. Employer will be solely responsible for payment of premiums that must be paid at the beginning of every new insurance year unless otherwise is agreed upon.

Article 37: In the event of non-payment of premiums on the dates agreed upon,

the insurance company may terminate the policy when its validity date comes to an end, recover the insurance cards and collect the premium due. Insurance company shall notify the Council and the authorized service providers network of such action.


Article 38: A portion of the surplus money coming from insurance operations

shall be transferred to the cooperative health insurance fund in accordance with the principles of cooperative insurance. This portion shall be calculated in accordance with the results of the operations of the insurance company after the approval of the other supervisory bodies.

Article 39: The Health Insurance Council shall issue the rules defining the

Fund’s objectives governing its operations in accordance with provisions of article (38).


Chapter Six : The Practice of Health Insurance Operations

Article 40: Insurance Companies licensed to operate in the filed of insurance

shall carry out health insurance operations in the Kingdom. The companies regulations and other related regulations in force in the Kingdom will be applicable to any provisions not included in these rules or any subsequent rules to be enforced in the future.

Article 41: Insurance Companies may not practice health insurance operations

prior to their preqaulification by the Council. Prequalification shall be limited to three years and shall be renewable for similar periods.

Article 42 : A- The Council shall charge fee for prequalification of the

cooperative health insurance companies amounting to SR one hundred fifty thousand.

Article 43: Insurance Companies operating in the field of health insurance may

practice other types of insurance provided that the financial matters related to the health insurance activities are separated from those belonging to other activities, as directed by the supervising authority.

Article 44: Insurance companies (authorized to perform insurance activities in

the Kingdom) shall be prequalified to practice health insurance activities based on an application to be submitted for this purpose and the Council shall have the right to specify the details that must be incorporated in the application within the limits required, for its evaluation. The .Council shall, within a hundred and eighty days of date of submission of application, -take a decision in respect of the application for prequalification.


Article 45: The Insurance company shall submit the following documents along

with its application for prequalification : 1- Company name and address.

2- Articles of association or memorandum of incorporation.

3- Name of the chairman, members of the board, the managing director aI1d the executive managers.

4- Annual accounts audited by a certified accountant for the three years period preceding the submission of the application for existing companies and plan of operation for new companies.

5- Name of the independent actuary or the company specializing in actuarian studies.

6- Names of Auditors.

Article 46: The plan of operations shall include a 'statement of estimated

revenues and' expenses, technical allocations and the projected results for tl1e tl1ree years following the submission of application, all in accordance with the form especially prepared by the Council for this purpose as well as the plan of arrangements made for re- Insurance.

Article 47: The insurance company shall submit a statement issued by the other

supervisory authorities stating that the company will observe the minimum requirements of solvency.

Article 48: The Council may select from the applicant companies those ones


1- Authorization to perform insurance operations

2- Technical, administrative and medical staff as well as systems for approvals, - handling of claims and payment of dues. These functions may be performed through a contract with a medical claims management company licensed by the Council.


Article 49: The prequalification of an insurance company may be rejected by a

letter stating the reasons for such rejection in the following cases:

1- If the Council gets information from the other supervisory authorities indicating that the executive managers of the company lack proficiency and falls short of the necessary professional requirements.

2- If the Council gets information from the other supervisory authorities indicating that the company is unable to preserve the interests of the beneficiaries in a proper manner or is unable to meet its obligations permanently.

3- In the event of non-payment of fees prescribed for granting or extending prequalification as stated in article (42) of these rules.

Article 50: Every insurance company must seek the assistance of an actuary or a

company specialized in providing actuarial services as directed by the supervisory authority so that such actuary can submit an actuarial report to the supervisory authority about the health insurance activities of the company showing adequacy of allocations and the pricing policy.

Article 51: The independent actuary must ensure adherence to insurance

procedures in the calculation of contribution in the insurance and technical allocations. The actuary must in this connection review and audit the company's financial matters, and in particular he shall make sure at all times that the company meets its obligations resulting from the insurance policies and that the company has under its disposal adequate assets within the solvency margin set by the supervisory authority. If the actuary finds out that allocations required are no longer available he must notify the supervisory authority immediately.


Article 52: Every insurance company shall prepare accounts audited by certified

accountants authorized to operate in the Kingdom and a business report covering the operations of the previous year for - submission to the Council within the first three months of the year following the end of the financial year of the insurance company.

Article 53: Every licensed insurance company shall submit a statement to the

Council confiffi1ing the following:

1- That the company's capital is free and not encumbered and equals the solvency margin at least.

2- That the solvency margin is calculated to show the company's ability to meet its ongoing obligation.

3- Submit a guarantee letter to the Cooperative Health Insurance Council equaling one third of the solvency margin provided that the amount of the guarantee is not less than SR twenty five million.

Article 54: The Council shall approve non-governmental health care providers

according to the following criteria :-

1- That the health care facility is licensed by the Ministry of Health.

2- That individuals providing health care have been registered by the Saudi Commission for Health Specializations.

3- That the health care facility meets the minimum requirements of quality stated in articles (109) and (110) of these rules.

Article 55: Health care service providers shall be approved by virtue of a letter

issued by the Council and the annual fee for this purpose must be paid to the Council as. follows

1- SR 2000 for open physician clinic ~

2- SR 5000 to SR 10000 for a clinic.(dispensary)

3- SR 10000 to SR 20000 for one day surgery centers -


Article 56: The Council shall fix the fee for each case based on article (55) as

well as the fee for the rest of service providers such as Diagnosis Centers, pharmacies and labs.

Article 57: The authorization of a health facility shall be canceled if the Ministry

of Health withdraws the facility’s license and the Council shall notify all insurance companies of this cancellation.


Chapter seven: Supervision on the relationship between the Health Insurance parties (scope and goals of supervision)

Article 58: The Health Insurance Council shall supervise and monitor the

universality of the Health Insurance coverage and shall ensure that the parties in the Health Insurance relationship perform the tasks and responsibilities entrusted to them under these rules.

Article 59: The supervisory authority shall be in charge of the supervision on the

insurance companies activities in the field of Health Insurance. This includes ensuring the solvency of the company, adequacy of capital, sound assets, technical allocations and its ability to meet obligations towards the beneficiaries of the Health Insurance provided. The supervisory authority shall notify the Council of any shortcomings in the position of any insurance company in accordance with the requirements of this article..

Article 60: The Council may require the amendment of the plan of operations of

the Health Insurance companies prior to concluding of new insurance policies, as deemed necessary, for the protection of the interests of the beneficiaries. The effects of such amendment shall be extended to include existing insurance policies and the policies that have not yet been concluded.

Article 61: The Council may request from the supervisory authority information

and data about all the work issues related to Health Insurance. 'The Council in certain cases - especially in cases related to the general provisions of the health insurance, request forms and other printed matter used by the health insurance company in its correspondence with employers, beneficiaries and service providers as well as contracts signed with the health insurance claims management company.


Article 62: TI1eCouncil and whoever is nominated by the Council, may during

certain periods of time or at any other time, perform reviewing and auditing taslcs in all respect of insurance companies within the sphere of competence of the Council and may also request other supervisory bodies to do so and to provide reports in this regard.

Article 63: The Council shall have the right to make -reservations on any of the

executives of any insurance company and shall notify other supervisory bodies accordingly.

Article 64: Members of the Councilor 'any of its staff may not disclose

confidential information that come to their knowledge in the course of their implementation of these rules. This also applies to any person who may get to know such information from official reports. The provisions of this article will not apply to disclosure of information where it is not possible to single out the disclosing company.

Article 65: The Council may use the information stated in Article (64) for the

following purposes:

1- Examining the applications submitted by insurance companies for prequalification or renewal thereof.

2- The directives issued by the Council.

3- Following up of any violations of the obligations arising out of the insurance policy in accordance with article (14) of the system.

4- Within the framework of the procedures of handling complaints regarding decisions taken by an insurance company.

5- Within- the frame work of .the procedures of considering and deciding on violations in accordance with article (14) of the system.


Article 66: The observance of the confidentiality of information as set forth in

article (64) shall not prevent providing the following information specifically to:-

1- Judicial authorities, courts or other affiliated bodies.

2- The authorities in charge of implementation of the system as per its provisions or other related regulations so long as such authorities request the information for the purposes of finalization of their tasks and provided that secrecy requirements set forth in article (64) of these rules are adhered to.

Article 67: The other supervisory authority shall have the right to supervise the

settlement of matters related to existing insurance policies in the event of the prohibition of the activity of an insurance company, the suspension of its operations or in the event of withdrawal of its license Company shall coordinate with the Cooperative Health Insurance Council in this regard.

Article 68: The Council may withdraw prequalification for practicing health

insurance business if the insurance company breaches the prequalification requirements and conditions. In the event of withdrawal of prequalification, the beneficiaries shall be transferred to another insurance company to be selected by the employer. This also applies in the event of suspension of its operations without the withdrawal of prequalification.

Article 69: The Council may also withdraw prequalification of practicing health

insurance business if the insurance company fails to use pre qualification within twelve months or if it expressly waives the prequalification or ceases to practice-its business for six months.


Article 70: With the exception of the cases indicated in articles (68) and (69)

withdrawal of prequalification shall be coordinated with the concerned authorities.

Article 71: The Council shall be financed by:

1- The prequalification and the annual renewal fees collected from the Insurance companies.

2- The tee of the annual authorization of the non-governmental health service providers.

3- The fees of supervision and control over the insurance companies at the rate of one percent of the health insurance premiums as per the audited financial statements of the previous year.

4- The fee collected by the Council for studies regarding the exemption of the parties having their own medical facilities taken from the insurance coverage or portions thereof. The Council shall fix such fee.

5- Other fines due to the Council and fines ~posed by the violations committee of the cooperative health insurance system violations committee as stated in article (111) of these rules.

6- Donations, gifts and investment returns.

7 - Any amounts collected from any other sources such as, the issue of journals, manuals, consulting or training activities that may be performed by the Council.

Article 72: The Council shall publish general information on the activities of the

insurance companies prequalified by the Council. Coordination in this respect may be made with the other supervisory authorities. Council, when required, may interprete these rules of implementation.


Article 73: The Council shall publish, at its discretion, whatever tables and

statistical data related to insurance for any business year without specifically referring to certain insurance companies.


Chapter Eight: The Relationship between the

Insurance Parties

Article 74: The Council shall specify the requirements for the design of the

health insurance card and its contents in collaboration with insurance -companies and health service providers,

Article 75: The insurance companies and service providers shall observe tile


1- Provide services in accordance with generally accepted professional and moral criteria that comply with accepted new medical techniques, taking into consideration the achievements made in the field of medicine. Service providers may not demand from insurance companies providing services inconsistent with the above.

2- Medical procedures shall' be restricted to necessary treatment required for performing the task.

Article 76: The insurance parties i.e. policy holders, insurance companies and

service providers shall, each within his sphere of interest, follow the generally accepted professional criteria for:

1- The Payment of premiums by policy holders, on time to the Insurance companies.

2- Expedite the giving of approvals by insurance companies to service providers for providing treatment to beneficiaries and the settlement of the claims of the service providers,

3- Expedite and facilitate the providing of treatment services to the beneficiaries by service providers and the submission of claims to insurance companies for speedy settlement of dues.


Article 77: Insurance Companies may not own or operate health care facilities

for the treatment of the insured, nor may the private health facilities own health insurance companies.

Article 78: The contracted parties in the insurance policy shall be the policy

holder (Employer) and the insurance company.

Article 79: Employer shall provide the insurance company with all information

it requests. If the insurance company has reasonable justifications to suspect the correctness of such information, the company may refer the matter to the Health Insurance Council for verification. Employer shall based on the Council's request provide all required documents and shall let the representatives of the Council review such documents at its headquarters.

Article 80: Employer shall explain and clarify policy contents and the limits of

coverage of beneficiaries included in the policy.

Article 81: Without prejudice to the requirements of regulations and

instructions, the employer shall impose penalties on the beneficiary has been legally proved to have abused the service.

Article 82: Employer shall return the insurance card to the insurance company

when the beneficiary leaves work or upon the expiry of the term of the insurance policy. Employer shall be held responsible for any expenses arising from his non-compliance with such condition.

Article 83: The insurance company shall, in order to meet its obligations and

provide the benefits, conclude health service contracts with authorized service providers. Hospitals and governmental health care facilities, open to all patients, may treat the beneficiaries and the cost of such treatment shall be Dome by insurance companies.

Article 84: In emergency cases only, treatment may be provided by specialists

and hospitals without a referral from a primary health


care facility, This provision also applies to treatment by service providers who have no health service contracts with the insurance companies. If the insurance company disapproves on the continuation of treatment in this center, patients shall - when their health conditions stabilize - be transferred to one the service providers network centers.

Article 85: The Service provider shall be held responsible when one of his

employees or physicians commits forgery, fraud or abuses the service provided.

Article 86: The health service contract shall as a minimum requirement

incorporate the following and the Council may propose a guideline service contract to regulate the relationship between the parties concerned.

1- Mutual rights and obligations and the penalties to be imposed in the event of violation.

2- The compliance of service providers with quality standards according to conditions and' procedures set forth in articles (109) and (110) of these rules.

3- Service providers obligation to observe the requirements of cost efficiency according to the provisions of article (75) of these rules. Service provider shall prescribe all medicaments and male all prescriptions in accordance with such requirements.'

4- Procedures for settlement of wages and settlement of amounts due for prescriptions dispensed.

5- Preconditions concerning notices and the periods of such notices.

6- The method of settlement of disputes arising out of health service contracts.


Article 87: The health service provider shall verify the identity of the

beneficiary. If a service provider treats a person other than a beneficiary, he shall bear the cost of such treatment.

Article 88: The service provider shall demand his dues related to the treatment

of beneficiaries in the manner agreed upon with the insurance company within a period not exceeding 90 days from date of maturity.

Article 89: The service provider shall abide by the coding system drawn up by

the Council for describing cases of treatment, their cost and request for payment of dues.

Article 90: The services provider may terminate the health service providing

contract with, insurance company with the observance of the termination conditions in the event of delay of payment of dues. In this case the insurance company shall notify employers accordingly.

Article 91: The Insurance Company shall, on the effective date of insurance

coverage furnish policy holder with beneficiaries insurance cards and explanatory manuals including scope of insurance coverage of policy, limits thereof and authorized service providers network. Employer shall officially and actually hand these over to the beneficiaries on the effective date of insurance coverage. Insurance Company shall notify authorized service providers network or the joining of the policy holder of the insurance coverage as well as additional coverage, if any.

Article 92: The insurance company and the policy holder shall take care - of

beneficiaries circumstances by introducing a service providers network that can meet the needs of the beneficiaries and the conditions at their places of work so that beneficiaries will not" be forced to seek service from service provider outside of the network.


Article 93: Insurance company shall not be required to conclude health service

contracts with every service provider authorized by the Council. The company may select any authorized service provider that is capable of providing the best of services to meet the requirements of the health service contract.

Article 94: Insurance company shall not be required to use the service of all

service providers with whom contracts are signed for a given policy.

Article 95: Insurance company shall respond to the request for approval on

treatment cost within sixty minutes, and in the event of non- approval reasons for disapproval shall be put in writing. The Council shall draw up the service criteria in this connection.

Article 96: Insurance companies may appoint Saudi physicians, jointly or

severally, to monitor compliance with treatment conditions within the limits of cost effectiveness set forth in article (75) of tl1ese rules during the treatment of a beneficiary. If the appointment of Saudi physicians is not possible, insurance companies may request an exemption the Council for contracting non-Saudi physicians. However, the extinguished medical staff, must be selected from Saudi Specialists and consultants. In the event of requiring part time consultants insurance companies shall seek to employ Saudi specialists and consultants from those working for the public sector.

Article 97: Physicians appointed to work for insurance companies shall be

professionally independent and their views during their supervision shall only be subject to the medical requirements. They may not interfere in the medical treatment of beneficiaries.

Article 98: Service providers and beneficiaries shall provide physicians working for the insurance companies with all information required


and shall put at their disposal all documents required for the performance of in accordance with the provisions of article (96) of these rules.

Physicians shall be given access to hospital wards, medical supervision offices and medical file~ of any authorized hospital in which a beneficiary was treated or is being treated whenever the need arises for carrying out supervision functions entrusted to them and this shall be in coordination with the hospital concerned.

Article 99: The Council shall have the right to have objections on anyone who

proves to be unqualified medically or whoever violates the ethics of the profession.

Article 100: Insurance company shall pay the dues of the service providers

within a peri9d not to exceed sixty days of date of request for payment.

Article 101: Insurance company and service providers shall agree on the

settlement of requests for payment. In case of disagreement either party may refer the dispute to the Cooperative Health Insurance Council.

Article 102: Insurance Company may terminate a health service contract with a

service provider after the approval of the policy holder and the appointment of a replacement of same standards provided that the notice period as well as the. conditions of termination set forth in the contract signed by them are observed, if the service provider breaches, in full or in part, the conditions of providing service.

Article 103: Beneficiary shall provide the insurance company with all

information it requires for defining the details of an emergency or service obligations. shouldered by the insurance company and the extent of such obligations.


Article 104: Beneficiary shall present himself for check up by a licensed

physician authorized by the Council and appointed by the company if the latter wishes him to do so. The company shall bear the cost of check up in this case.

Article 105: Beneficiary shall, when requesting treatment, furnish his insurance

card and I.D. to the service provider, who will hand them back to the beneficiary after taking the necessary data for the treatment.

Article 106: Beneficiary shall call on one of the primary health care facilities or

physicians working for the service providers network designated for him. Referral to a specialist or a hospital shall be decided by an omnipractitiner.

Article 107: Beneficiary shall bear the difference in cost in the event of hi~

calling directly on a specialist or consultant for check up as shown in the policy.

Article 108: Recommendations for hospitalization shall be limited to cases

where treatment in out-patient clinics is inadequate. In this case one day surgery or treatment service shall be used and if the beneficiary reports to a hospital other than that specified in the referral documents, he shall bear the difference in the cost of treatment.


Chapter Nine: Quality Assurance of Service Provided

Article 109: The Council shall, in cooperation with proficient governmental

health institutions, specify the preconditions required for maintaining the quality of services provided relating to the implementation of the previsions of article (106) of the system. In the course of specifying the requirements, in particular, the following shall be observed :--

1- Availability of minimum specific requirements of quality that must be adhered to by the service providers.

2- Adoption of diagnostic and treatment services that must be provided or will be provided at the expense of the insurance company.

3- Service providers compliance with procedures in respect of maintaining good quality. .

Article 110: The procedures related to maintaining good quality shall cover as a

minimum requirement the following areas :--

1- Criteria related to the medical check-up rooms of the authorized service providers.

2- On the spot regular inspection of authorized hospitals, clinics and dispensaires by Council staff or by qualified persons appointed by the Council.

3- Evaluation of health service contracts in terms of maintaining quality controls.

4- Service providers shall - every three years and on their own account - contract through the Council - a specialized consulting office to-evaluate and measure the extent of compliance of service providers with the requirements of quality. Council must be provided with a report thereon.


If the service provider breaches this stipulation the Council may cancel authorization.

Chapter ten: Penalties and Settlement of Disputes

Article 111: A committee (or more) composed of six members from the

ministries set forth in article (14) of the system to be called "the cooperative health insurance system violations committee" shall be formed by a resolution from the chairman, to decide on violation to the provisions of the system and the appropriate penalties thereof. Penalties shall be imposed by a resolution from the chairman and may be appealed before the Board of Grievances' within sixty days of notification.

Article 112: This committee shall hear the violations arising between tl1e

beneficiaries & policy holders on the one hand and insurance companies & service providers on the other hand.

Article 113: Complaints from a parties shall be submitted in writing to the

Secretary General of the Council within ninety days of date of dispute, being the 'Subject of the complaint.

Article 114: The Secretary General of the Council shall refer the complaint to

the committee hearing the violations of the provisions of this system.

Article 115: Amounts collected from the financial penalties related to the

.violation of the provisions of this system as well as fines specified in articles (Ill) and (116) shall be paid to the Council as provided for in the Financial Rules.

Article 116: If the Committee finds out that the complaint was - untrue and

unjustifiable, it may take the necessary legal action or propose appropriate punishment to be inflicted on the complainant.


Article 117: The Committee shall hold a session, when the need arises, and the

Council shall pay one thousand Saudi Riyals as remuneration to each member for each session provided that remuneration shall not exceed SR twenty thousand for each member per year.

Article 118: The Council shall prepare detailed procedures for the submission of


Chapter Eleven: Transitional Provisions and Enforcement of the

Rules of Implementation

Article 119: Procedures for prequalification of health insurance companies and

approval of service providers, to whom the provisions of this system apply, shall commence after the promulgation of these Rules.

Article 120: These Rules shall be applicable to employers as follows:-

1. Companies and sole establishments, whose foreign labour exceed five hundred persons – within one year of date of issue of these rules.

2. Companies and establishment, whose foreign labor are more than one hundred persons – within two years of date of issue of these rules.

Article 121: With due regard to article (120) of these Rules, if insurance policies

were signed prior to the implementation of this system, the contracted parties shall be responsible for termination of their obligations within one year of date of issue of this system. They may maintain same obligations if they manage to obtain the Council’s approval on the continuation of their previous arrangements, provided, however, that the insurance company should be prequalified and the service provider be authorized and that they are able to carry on their obligations in accordance with the provisions of this system and the rules of implementation thereof.

Article 122: The Council shall have the authority to propose the amendment of


Article 123: These rules shall be issued by a resolution from the Minister of

Health and shall be published in the Official Gazette and put into force as from the effective date of the implementation of the system, i.e. after ninety days of date of issue of the Rules.


Kingdom of Saudi Arabia

Cooperative Health Insurance Council Secretariat General


Cooperative Health Insurance Policy

In implementation of the cooperative health insurance system issued by Royal Decree No. M/10 dated 1/5/1420 H and the rules of implementation thereof issued by Minister of Health Resolution No.__________ " dated _________.

Whereas the policy holder has submitted to (name of insurance company) (referred to hereinafter as the "Company") a written application (which will be deemed a basis and an integral part of this policy) for the purposes of insuring the policy holder and his dependants or his employees and their dependants whose names are listed in the schedule attached to this policy and who a):e referred to hereinafter as the "insured", and has paid the premium or agreed to pay it.

Therefore, the company agrees based on the above - with the policy holder to cover the costs of providing health care to the insured under this. Policy, to the

extent and in the manner shown therein, through a network of service providers appointed by the insurance. company provided always that such insurance shall subject to the conditions, definitions, designations and limits of coverage incorporated this policy any additional schedules (already approved by the cooperative health insurance council) or those that will be agreed upon later.


Part one: Definitions

For the purposes of this insurance the following work, phrases and expressions shall be interpreted and construed


wherever mentioned in this policy, appendixes or attachments - in accordance with the following definitions:

1- Accident: Unexpected accident injury or an accidental incident taking

place during the insurance term.

2- Ailment: An illness or disease caught by the insured person that

necessarily requires medical treatment by a licensed physician during the insurance period.

3- Allergy: The person's allergy to certain kinds of food, weather, pollen, in

particular, and any other agents such as. plants, insects, animals, metals and other elements and materials, where the individual suffers from reactions in tile body caused by tile direct

or indirect contact with such

materials leading to cases of asthma,

, indigestion, itching, hay fever,

eczema and headache.

4- Beneficiary (The insured): A person covered by the System (employee

or dependant) whose name is listed in the schedule of the insured persons attached to this policy.

5- Benefit: Cost of providing health services included in the insurance

coverage within the limits shown in the schedule of the policy.

6- Premium (contribution): The amount payable by the policy holder in

return for the insurance coverage provided by the policy during the term of insurance.

7- Congenital Deformation: The functional, chemical or constructional

disorder usually existing before, birth, hereditary or caused by environmental factors.


8- Insurance Coverage: The basic health benefits available to the

beneficiary as specified in the insurance policy attached to these rules.

9- Percentage of Deduction I Portability (Contribution in Payment):

The portion payable (as specified in the policy schedule) by the beneficiary (the insured) in the event of medication in out-patient clinics.

10- Employee: Any person actually working for the policy holder, and is entered

in such capacity in the latter's registers, who has not yet reached the age of 65 years when joining the insurance coverage.

11- Dependent:

A- The husband / wives entered in this capacity in the registers of the policy holder who are residing legally in the Kingdom of Saudi Arabia. B- Children of the employee, children of the husband or wives or the children legally sponsored and residing in the kingdom of Saudi Arabia, who are supported by the employee .and entered in this capacity in the registers of the policy holder.

12- Claim Supporting Documents:

All documents proving and evidencing: age. of the insured person, his nationality, ill, validity of insurance coverage, the circumstances of tl1e accident for which "the claim is raised and the payment of cost as well as other documents such as the police report, bills, receipts, prescriptions, physician' s report, referral, recommendations and any other original documents that may required by the company.


13- Direct Debit Basis or Debiting the account of the Company:

The non-payment facilities available for the insured persons by the service provider / providers appointed by the company where all such expenses are directly debited to the account of the company.

14- Commencement Date:

The date shown in the policy schedule on which the insurance coverage starts.

15- Effective Date: The date designated by policy holder and agreed upon by he

company for the commencement of the coverage of the person under the policy or for adding or omitting of an insured person from the policy.

16- Appendix: A document issued by the company using an official form dated

and signed by an authorized' officer proving the authenticity of any amendments in the policy and not. prejudicing the basic coverage - based on a request in writing from the policy holder.

17 - Hospital: An authorized health facility acceptable to the policy holder and

the company, and is licensed to operate as a hospital under regulations in force for providing reimbursable treatment under this policy. Hospital in this policy will not include hotels, guest houses, dormitories, rest houses, recuperation houses, sanitariums, care houses for the persons in custody, infirmaries, asylums or any other places used for accommodating and treating alcohol and drug addicts.

18- Hospitalization (patients): Admittance of an insured person as an

in-patient in a hospital until the morning of the following day based on a referral from a licensed physician.


19- Insurance: The evidence of the implementation of the insurance coverage under this policy, schedules, appendices or attachments thereto.

20- Licensed physician: A medical practitioner in position of a degree who is

legally licensed to practice medicine, prequalified and acceptable to the policy holder and the company for providing cost reimbursable treatment under this policy.

21- Limits of Coverage: The maximum limit of liability of the company as

set forth in the schedule of the policy for any insured person before any deductions/ portability.

22- Service Provider: The authorized and licensed person or health facility,

under the regulations in force, to provide medical services in the Kingdom such as a hospital, a diagnostic center, a clinic, a pharmacy, a laboratory, a physiotherapy or a radiotherapy center.

23- Pregnancy & Delivery: Any pregnancy and / or birth arising from a

legitimate martial relationship.

24- One day surgery or Treatment: A surgery or a treatment that necessarily

requires pre-arrangements for one day stay only in a hospital or a treatment center.

25- Treatment in Out- Patient Clinics: The frequent calling - by an insured

person - on out-patient clinics for the purposes of diagnosis or medical treatment of a disease.

26- Service Providers Network: A group of health service providers

authorized by the Cooperative Health Insurance Council and designated by the insurance company for providing services to the employer / policy holder by debiting .cost directly to insurance -company account upon furnishing a valid insurance card for the insured. Such network shall include the following three health car categories:-


unexcluded under part three - prescribed by a licensed physician for an illness caught by the insured, provided that such expenses are necessary, reasonable and customary at the time and in the place in which they have been incurred.

Based on the above, reimbursable costs shall include the following:

A- All medical check up, diagnosis, treatment, medicament costs as per policy schedule.

B- All hospitalization expenses including operations, and one day surgeries and treatment as well as delivery .

C- The treatment of teeth and-gingival diseases.

D- Preventive measures specified by the Ministry of Health such as, vaccinations and maternity & childhood care.

2- The expenses of repatriation of the remains of the insured to his country of origin.


Part Three: Designations and Exemptions

A- This policy will not cover claims arising out of the following:- 1- Injury caused deliberately by the person.

2- Illnesses, caused by misuse of certain medicaments, stimulants, tranquilizers or by consumption of alcoholic drinks, drugs and the like. 3- Plastic surgery or treatment unless necessitated by an accidental bodily

injury not excluded in this part.

4- Full checkups, vaccinations, drugs or preventive procedures that do not require any medical treatment stipulated in this policy (with the exception of the preventive procedures stated by the Ministry of Health such as, vaccinations and maternity & childhood care).

5- Treatment related to pregnancy and delivery for a woman on a single status contract.

6- Free of charge treatment of an insured person.

7- Rest, general body health programmes and treatment at social welfare houses.

8- Any illness or injury resulting directly from the profession of the insured. 9- Treatment of genital diseases and the medically recognized diseases

usually communicated by sexual intercourse. '

10- The treatment expenses for the period following the diagnosis or HIV or the diseases related to HIV including AIDS (Acquired Immunity Deficiency Syndrome) their dirivatines, synonyms or other fon11S thereof.

11- All costs related to teeth transplanting, dentures, bridgework fixed & removab1e), orthodontics- excluding those caused by violent external actions.





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