Resolving insurance disputes in the Kingdom of Saudi Arabia: a critical assessment of the Insurance Dispute Committee

In many countries, when policyholders or consumers are denied coverage by insurers in an arbitrary manner, it may be difficult for the policyholders to successfully challenge the adverse coverage determinations. They may challenge insurers in court (litigation) or via means outside of the courtroom (alternative dispute resolution options: arbitration, negotiation, mediation). In the Kingdom of Saudi Arabia (KSA), the Cooperative Insurance Companies Control Law (CICCL) and its Implementing Regulations provide for the creation of an administrative tribunal called the Insurance Dispute Committee (IDC). All insurance disputes must be submitted to this tribunal. This study seeks to determine whether this is the best option for consumers in the KSA. In order to achieve this aim, the IDC is analysed at three levels: doctrinal, practical, and empirical. The doctrinal analysis reveals that the provisions of the CICCL regarding panel decision-making are ambiguous. Also, the discretion enjoyed by IDC adjudicators is too broad, and in practice, they seldom appeal to Shariah principles or provisions of the legislation. The system is therefore unpredictable, given that cases are decided on an ad hoc basis. The practical inquiry provides different findings to the doctrinal analysis. The practical inquiry affirms the position that the IDC prioritises the interests of the parties and yields a very high level of satisfaction with outcomes. The disconnect between the results of the doctrinal analysis and the findings of the practical inquiry is explained by capturing the perceptions of a sample of IDC adjudicators. The empirical study reveals that IDC adjudicators have a unique conception of what constitutes a well-reasoned decision. However, the explanations in their decisions satisfy Saudi parties, specifically consumers. Thus, unlike the doctrinal analysis, the findings of the practical and empirical inquiries provide support to the Saudi legislator’s decision to compel parties to submit disputes to the IDC.