الهيئة العامة للرقابة المالية

Dr. Islam Azzam – FRA Chairman :

• Amending vehicle depreciation rates to ensure “Fair Indemnity”.

In line with the FRA’s ongoing mandate to protect stakeholder rights and ensure fairness within the motor insurance sector, the Authority has conducted an extensive review of market practices. This follows a comprehensive Regulatory Impact Assessment of the regulations governing non-banking financial activities.

Building on these findings, Dr. Islam Azzam, FRA Chairman, has issued Board Resolution No. 897 of 2026. This resolution updates the regulatory framework for vehicle depreciation rates, aiming to strike a strategic balance between ensuring fair indemnity for policyholders and maintaining overall market stability.

Dr. Islam clarified that the resolution mandates all licensed motor insurance providers and associations to treat the depreciation rates in Article One as a maximum threshold for accident repair estimates. While the resolution establishes these statutory ceilings, it grants insurers the flexibility to stipulate lower depreciation rates within their policies. This competitive framework is designed to prioritize the best interests of policyholders.

Addressing market shifts and rising costs for vehicles and spare parts, the new resolution aims to eliminate friction between insurers and policyholders. It provides a clear framework for handling damaged parts following an accident. Under the new controls, the settlement process is governed by the insurance contract, allowing companies to either collect the damaged parts or apply a contractual deduction if the policyholder chooses to retain them.

The Authority underscores that this Board Resolution is designed to provide mutual benefits for all stakeholders while effectively mitigating potential disputes within the sector.