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SAUDI ARABIAN INSURANCE COMPANY

The contents of this manual are confidential and restricted to the employees of
the Company and the information contained herein should not be disclosed or
imparted to any person under any circumstances.

It is the personal responsibility of all holders of the manual or sections of the

manual to safeguard their copies and ensure that amendments made are
incorporated into their copies. All holders of the manual, or any section of it,
should return their copy to the management at the end of their services.

This manual is to be used with effect from-1st September 2002 and replaces all
previous manuals and instructions.
 Page 2 of 75

INDEX

Important Notes ...............................……….. 3-5

Agency Commission .. ................................. 6

Motor ...............................……………………. 7-13

Property ...............................……………….. 14 - 31

Workmen's Compensation .......................... 32 - 34

Engineering (CAR/EAR/MB/Boiler etc) ..... 35-38

Equipment All Risks ................................. 39

Personal Accident .................................…. 40 - 42

Householder's Comprehensive ................... 43-44

Miscellaneous (CIS/CIT/FG/PL etc) .......... 45-47

Marine Cargo .....................................…… 48 - 50

Group Life and Medical ............................ 51

Page 3 of 75
 Page 4 of 75

IMPORTANT NOTES

Note 1 : THE PROCEDURES

The Underwriting Manual spells out in detail the procedures to be
followed. Please ensure that these are strictly adhered to.

Note 2 : CO-INSURANCE CLAUSE

If SAICO's share is less than 100% please attach the Co-insurance

Clause to the original policy duly signed and stamped by a11 co-
insurers. A copy of the signed Co-insurance clause must be attached
to our copy of the policy. In the absence of the Co-insurance clause,
we would assume that the balance share has been placed as
reinsurance of SAICO and your account will be debited for the
fronting fees.

Note 3 : BORDEREAUX

At the end of each month, the production bordereaux must be sent

along with copies of each policy/endorsement. Documents must be
sent only with the bordereaux in serial order of bordereaux to enable
us process quickly. For renewals please indicate the previous policy
numbers to enable us connect properly. We would highly appreciate if
you could indicate on our copies of policies/endorsements the rate
and calculation. This will greatly help our work and minimise
unnecessary queries.

Note 4 : STANDARD POLICY WORDINGS

SAICO standard wordings for policies and clauses must be used
and there is no need to attach these with our schedule copy. If
you do not have a particular standard wording, please contact
the concerned department for assistance.
If other than SAICO standard wordings are used (and these can
be done only if we specifically agree), then the full set of
wordings should be attached to our copy of the policy.
It is extremely important to ensure that wordings or clauses or
endorsements, which are stated in the schedule as part of
policy, are attached to original documents.
Where cover provided is property all risks the wordings allowed
are either LM7 or ABI . NO OTHER MANUSCRIPT IS ALLOWED.
 Page 5 of 75

[Notes]

Note 5 : AUTHORITIES
(a) The authority given here is in respect of: -

i) Direct Business

However, you may accept Facultative reinsurance for Property,

Marine Cargo and Personal Accident only, subject to the terms
and conditions of the relevant sections. To avoid double
acceptances, please check with Cedants that they have not
placed shares with SAICO through other ACE field offices, other
intermediaries or directly.
You cannot, under any circumstance, accept shares under
treaties or automatic cessions for any class of business.

ii) Risks located in KUWAIT

For Marine Cargo by sea/air, your authority is in respect of
shipments to or from Kuwait only.
(b) We have higher treaty limits than what we have given you in the
manual and the exclusions/restrictions mentioned under each class of
insurance relate to risks we wish to see prior to acceptance. Therefore,
please refer to us whenever you need higher capacity and/or whenever
you wish us to consider a risk falling under any of the exclusions.

Note 6: SHORT PERIOD RATE SCALE

(A) For short term policies or in the event of any cancellation during the
policy period (first year of insurance) the following would be the
percentage scale of annual premium charged: -
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Upto 1 month : 25%

Upto 2 months : 35%
Upto 3 months : 40%
Upto 4 months : 50%
Upto 5 months : 60%
Upto 6 months : 70%
Upto 7 months : 75%
Upto 8 months : 80%
Upto 9 months : 85%
Over 9 months Full Annual Premiums
 Page 7 of 75

[Notes]

(B) No refund shall be given in case there are claims outstanding/paid under
the policy.
(C) Subject to (B) above, pro-rata refund of premium for the unexpired portion
can be granted only under the following circumstances :

1) cancellation of the policy by the Insurance Company

2) cancellation after the 1st year period due to sale of vehicle in the
case of a motor policy

3) if there, is a prior agreement approved by us and recorded in policy

schedule.

NOTE:
This scale applies to all classes except Marine Cargo, Hull and
Personal Accident.

Note 7 : FACULTATIVE PLACEMENT AND ACCEPTANCES

(A) For risks placed facultatively as reinsurance of SAICO, the

facultative reinsurance commission would be split 20 pct. to SAICO
and 80 pct. to ACE with a minimum of 5 pct. of premium to SAICO.

(B) For risks accepted facultatively on behalf of SAICO, the Original

Gross Rate must be reported. The total commission payable by
SAICO will be the original commission to Ceding Companies plus
7.5% to ACE subject to a maximum of 27.5% on Property &
Personal Accident and 25% on Cargo.
Page 8 of 75
 Page 9 of 75

AGENCY COMMISSION

The agency commission for the various classes of business are as follows:

Life ............:...............………………………………………..………………: To be agreed

Medical ....................…………………………………………………………: 15 pct.

Marine Cargo ......................………………………………. ………………: 25 pct.

Marine Hull .......................... ……………………………… ………………: 12.5 pct.

Motor Commercial (excluding taxis, rent-a-cars & limousines)....… : NIL *

Motor Private ....................... ……………………………………………… : NIL *

Equipment All Risks .................. ………………………………………… : NIL *

Public Liability/Comprehensive General Liability ......... …………… : NIL *

Workmen's Compensation ...............…………………… ……………… : NIL *

Fire/Burg/HHC/ARP/VIP ................ …………………………………… : 25 pct.

EAR/CAR/MBD/Computer All Risks .....………………………………. : 17.5 pct.

General Accident (including PA business accepted in Life Dept.) … : 27.5 pct.

(*) Business is to be ceded on net of commission basis.

********
 Page 10 of 75

Motor

(A) BINDING AUTHORITY

Your binding authorities are as follows: -

(i) Motor Private : KD.15,000/- per vehicle
(ii) Motor Commercial : KD.20,000/- per vehicle

If the value exceeds your binding authority, please refer for rates/terms.
If the fleet value for Motor Private and Motor Commercial (separately or
collectively) for a single client exceeds KD.200,000/-please refer.

(B) CONDITIONS/EXCLUSIONS APPLICABLE TO ALL MOTOR BUSINESS

Without referring, you cannot renew or accept any new business for:
01) Cars used for races, speed tests and rallies.
02) Vehicles on rails.
03) Vehicles not designed to run on terra firma.
04) Fuel tankers, taxis, limousines, drive hire cars and vehicles carrying
explosives or flammable liquids or gases in bulk.
05) Buses for public transport other than for own use for transport of
employees.
06) High valued cars such as Rolls Royce, Porsche, Ferrari,
Lambourghini, Lotus, Maseratti, Sports Cars and the like.
07) Vehicle within airports.
08) Motor Trade policies.
09) Sabotage and Terrorisms

(C) TARIFF RATES

Our tariff rates are now modified to meet the current market trends
and you must use these rates for clients with good claims record.
However, you would have to use your discretion and judgment when
the clients claims record shows an adverse trend (See also
comments later).

Kindly note that the Tariff is on net basis to SAICO and would need to
be loaded for ACE commission.
Page 11 of 75
[Motor]
 Page 12 of 75

THIRD PARTY COVER

Per the tariff and understand you will provide TPL only if it is
necessary

COMPREHENSIVE COVER

MOTOR PRIVATE MOTOR COMMERCIAL

VALUES
NET RATE NET RATE
Up to KD.2,000 3.20% 4.00%
KD.2,001 TO KD.5,000 2.85% 3.50%
KD.5,001 TO KD.10,000 2.65% 3.00%
KD.10,001 TO KD.25,000 2.50% 2.75%
Minimum Premium (NET) KD.50/-
KD55.00

These rates are for repairs in our workshops. For rates with Agency
Repairs, refer page 13.

FIRE & THEFT ONLY COVER

For all types of vehicles apply a rate of 0.90% (NET) on value of the
vehicle.

THIRD PARTY FIRE AND THEFT COVER

Add the Third Party Cover premium to the Fire and Theft cover.
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 Page 14 of 75

[Motor]

PERSONAL ACCIDENT BENEFITS

You may give PAB per person at following net premiums:

Limit per person Net premium per person

KD.8,000 KD.10 KD.5

All Passengers as per full seating capacity should be covered

unless names are provided.
Fleet discounts also apply on the PAB premiums.
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(D) MINIMUM COMPULSORY- DEDUCTIBLES (EEL)

(i) Sedans valued less than KD 5,000.00 : KD 20

(ii) Sedans valued between KD 5,000.00 – 10,000.00 : KD.30

(iii) Sedans valued more than KD 10,000.00 : KD.50

iv) Pick-Ups/Mini-buses/Light : KD.50

Commercials

(v) Motor Commercial (other than

Pick-Ups/Mini-buses) : KD250

For very important Clients and in exceptional cases, the deductibles

may be waived by charging additional 10% of the agreed rate or the
excess amount, whichever is more.

(E) TERRITORIAL LIMITS

The above rates apply to covers within the territorial limit of State of
Kuwait.

For extensions outside Kuwait but within the Arab world excluding
Lebanon and Oman, the policy should be subject to: -
(a) third party cover to apply as an excess layer in countries where
third party liability is compulsory to be purchased at the
border.
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[Motor]

(b) additional premium computed at the rate of :-

- 20% of the annual premium or KD.5 per day, whichever
is less, for trips up to 1 month.
- 40% of the annual premium for KD.3 per day,
whichever is less, for trips exceeding 1 month but less
than 3 months.
- 50% of the annual premium for period exceeding 3
months or for annual policies.
For extensions to Oman, apply 50% of the additional premium given
in (b) above.

(F) FLEET DISCOUNTS

You may grant fleet discounts as per the following scale:

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4 to 10 vehicles 5 pct.
11 to 20 vehicles 7.5 pct.
21 to 30 vehicles 10 pct.
More than 30 vehicles 15 pct.

(G) FLEET RATING

 Page 18 of 75

Clients usually desire one rate for their entire fleet and not
individual rates for different values and different types of vehicles.
To arrive at an average rate, calculate the premium of each vehicle
using the rate given on earlier pages; divide the total premiums by
total sums insured to obtain the average rate.
Please ignore those vehicles where minimum premium applies as
this might result in the distortion of the average rate. The fleet
discount can be applied also on the minimum premium as detailed
in the following example :
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You are offered a FLEET of 6 vehicles (2 Private & 4

Example
Commercial) with the following values
 Page 20 of 75
Vehicle Values(KD) Tariff Rate Premium Premium (KD)
PVT 1 1200 KD.50 (MIN) 50 (MIN)
PVT 2 3000 2.85% 90
COM 1 1000 KD.65(MIN) 65(MIN)
COM 2 5000 3.50% 175
COM 3 7500 3.00% 225
COM 4 11250 2.75% 300
TOTAL 28700 905
 Page 21 of 75
[Motor]

Calculate Average Rate excluding vehicles where minimum premium

applies : KD .790 = 2.98%
KD.26500
Since the number of vehicles are 6, the FLEET DISCOUNT of 5% applies
on the average rate as also on the Minimum Premiums.

Hence, in this case, rate = 2.83% with minimum premium of __________

divided by 2 less 5% discount). You may round off the end rate and
minimum premium to the nearest decimal. In this case we get the Net
Rate 2.80% and Net Minimum Premium KD.45.00.
Note : You will need to load these end rates for your Commission.

(H) RENEWALS

a) For Individual Policies

In all cases where the earned Loss Ratio exceeds 80% (Net
Premium basis), policies should not be renewed without
substantial improvement in rate/deductible. If result continues to
be negative for two consecutive years, then do not renew without
our approval.
Generally, we discourage writing individual motor business unless
the client is important to your business connections.

b) For Fleet Policies

The basis of the renewal depends on the profitability of a particular
account. If the Loss Ratio exceeds 80% of the earned premium (on
net basis), then please refer prior to renewal with details also of the
other insurances of the client. The other existing insurances shall
be taken into consideration prior to coming up with fair and
reasonable renewal terms and conditions but each class would be
evaluated on its own merits.
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[Motor]

(I) OLD VEHICLES

No comprehensive cover to be given for individuals if the age of the vehicle is
more than 6 years. However, at your discretion, you may extend the age limit to
10 years by charging additional 10%'of the agreed rate for models over 6 years
but not to exceed 10 years.

For fleets with 10 or more vehicles, you may extend the age limit to 10 years
provided the number of old vehicles do not exceed 20% of the entire fleet.

(J) AGENCY REPAIRS (FOR SEDANS ONLY)

We would prefer to avoid granting this extension but can consider on individual
basis. Agency repairs can be given for current models only or up to 2 years old.
You may use following rating indications :
 Page 23 of 75

NET RATE DEDUCTIBLES

TYPE OF SEDAN 4.25% As permitted by Law but
Lexus Cars 3.75% if possible, apply
European Cars
3.75% at least twice the
American Cars
3.50% permitted limits if not
Japanese Cars
more
 Page 24 of 75

If these vehicles are part of a fleet, then the fleet discount also applies, but these
vehicles cannot be rated on the fleet average rate.

(K) INSPECTION
All individual vehicles for insurance must be inspected prior to acceptance. Any
damage noted during the inspection must be pointed out to the Insured and
preferably avoid cover until repaired or put following clause in the policy.

" The Company shall not be liable for the undernoted damages/dents/scratches
even if these damages/dents/ scratches are further damaged due to a loss
covered by the policy:

List the damages observed "

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[Motor]

(L) NO CLAIM BONUS (NCB)

The above rates do not leave us room to grant NCB. Whilst NCB is an useful
incentive to encourage clients to be more careful, the rates in the market are
already so low as to make the motor insurance unattractive. If NCB is to be
considered, then the rate/minimum premium should not be less by more than
10% of our tariff rates.

NCB can be considered only for individuals and not to

Corporates/EstabIishments.

CONCLUSION

We wish to emphasize, nevertheless, that the foregoing constraints are not meant to
distract your underwriting judgment; but, prudence is needed to achieve profitable
motor underwriting.
As you are aware, this class of business has greatly deteriorated during the last few
years primarily due to mounting claim costs without corresponding increase in rates.
As our bottom line is directly influenced by the Motor business and almost all claims
are funded from SAICO's pocket, it would be in the interest of all concerned to
improve results.

*****************
Page 26 of 75
 Page 27 of 75

PROPERTY

INTRODUCTION

The prime objective of this section is to lay down guidelines in the selection of
business with a view to create and maintain a sound and balanced fire portfolio
with satisfactory underwriting results. This is best achieved by the application
of experience and common sense to well known facts. Without proper
assessment based on full underwriting information, the acceptance of risks
simply becomes guess work and not underwriting.

Full facts relating to the risk and exposure must be known for proper
assessment and rating. To achieve this, the following must be done in each and
every case:

1. A proposal form must be duly completed and signed by the Insured.

2. A survey must be done by one of the office staff and the survey report
must be sent with the policy for our reference.

The information in a completed proposal form is important but might not be

sufficient to give a comprehensive understanding of the risk and hence a survey
must always be carried out.

For simple risks, such as residences and offices, the survey can be waived if all
facts are known to you (i.e. Proposal, construction, location, etc).

For large risks, especially warehouses and industries, it is recommended that

our Risk Control Engineer carries out a full-fledged survey. Whilst it is
preferable to do a comprehensive survey before attachment of risk, this can be
done later provided you/we have your preliminary survey and sufficient
information to rate accordingly. You are aware that we go through most policies
issued by you and wherever necessary, we may request a professional outside
survey even though sums may be small.
 Page 28 of 75
[Property]
UNDERWRITING

For proper selection of risks, the following essential facts must be known and
ascertained:

1) Proposer's name.

2) Location of risk.
3) Nature of occupancy and whether solely or partially occupied by the Insured.

4) If partially occupied, the nature of the trade carried out by others in the same
building must be known.

5) Exact type of construction and the age of the building.

6) Full description of the contents and breakdown in value between various

contents where applicable and necessary (For example, we need separate sums
for building(s), stock in trade, plant and machinery and other contents -
preferably building by building).

7) Whether hazardous goods are stored or kept on the premises. If yes, what are
these goods? What is their value? How and where stored? How far from other
goods or process? Ideally, hazardous or flammable goods must be kept in a
separate fire proof room or cabinet away from other goods.

8) For storage warehouses it should be additionally checked to ascertain that

stocks are well stacked. Ideally, stacking should be as follows:

- There should be clear spaces (not less than 1 meter) on all sides of stacks
and racks. Goods should not be stacked against walls. For goods in the
open, the stack . should be at least 2 meters away from the boundary
wall/fence.

- The spaces between stacks should be kept free of obstacles and

waste material.

- There should be a clear space of at least 1 meter between goods at the top
of the stacks and the ceiling or roof and a similar clear space beneath
sprinkler heads.

- Stacks of goods should be kept well clear of lighting fittings, heating pipes
and appliances, fire fighting and alarm equipment or doors.
 Page 29 of 75
[Property]

- Stacks should be arranged so that they can easily be covered by water

proof sheets in the event fire fighting operations become necessary.

- Stacks should be stable and not liable to collapse.

- Goods that can be damaged by water should be raised on shelves or

pallets (This could be a hazard in case of fire fighting operations).

9) For Production Areas, the following points must be additionally taken

into account:
- Production machinery/plant/equipment should be well arranged
so that congestion is avoided.
- Mechanical and/or electrical equipment must be properly
maintained and serviced. Precautions should be taken to prevent
oil leakage and drip trays should be provided where oil drips may
occur. It is a well known fact that floors soaked with oil and
grease can spread fire rapidly.
- Where the process involves hazardous material, it-must be made
sure that only those materials for immediate use are brought into
the production area and that any surplus is returned to the
hazardous material store after closing time.
- Finished products must not be allowed to accumulate near the
machinery and should be removed as frequently as possible to the
storage area.
- Premises should be kept clean and tidy. Waste should be removed
at regular intervals and always at the end of the working day.
10) If STF/water damage cover is needed, the following additional
information is. required:
- Integrity of building structure: if the structure is not fully
concrete, whether there are any openings in the roof or the walls
or between the roof and the wall.
- Elevation of the building from surrounding ground level and
possibility of drainage/water accumulation from outside the
premises.
- Basements, if any and whether stocks stored therein (In such
cases, STF/Water Damage cover should be avoided).
- If occupancy is storage/warehouse, whether the stock is elevated
on racks.
 Page 30 of 75
[Property]

11) Where applicable, whether the Insured maintains up to date records of

stock and other contents and if such records are safely kept with
duplicates at another location. For warehouse risks, it is imperative
that client maintains proper records in a place other than the insured
premises. In case records are not properly organised, please refrain
from writing such risks.

12) Whether the electrical installations are in good condition and well
protected in conduits or loose.

13) The cleanliness/tidiness of premises and the standard of management

must be investigated.

14) Regarding adjacent or neighbouring premises, the type of construction,

the trade carried out and the separating distance must be considered.
Careful note must be taken of combustible material stored between
buildings. The common problem is packing materials or empty cartons
which are not cleared immediately.

15) Details of fire fighting facilities available on the premises.

16) The previous claims experience of the client.

17) In a diligent and discrete manner, the Insured's financial position must be
investigated as in case of financial problems there might be a temptation
to welcome a fire loss as a solution to immediate difficulties.

PERILS INVESTIGATED

Here, we concentrate on the main exposure with respect to the perils covered
under a fire policy and how one should deal with them.

(A) FIRE

The chance of a fire starting and the likely extent of damage varies
between one risk and the other according to the type of construction and
the nature of occupancy and contents.

Whilst a building of concrete construction represents a good fire risk, a

building of steel structure would be less attractive than the concrete and
a wooden building would be much less attractive than the steel.
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[Property]

Likewise the nature of occupancy and contents is a major factor in

determining the terms to apply. However, common sense always plays a
very important part: two identical risks of the same type of construction
and occupancy could still attract different terms on account of the
standard of management, the attitude of client, etc. One might be
accepted and the other rejected.

When a building or group of buildings forming the same fire risk contain
differing forms of construction and/or occupancy, the terms to apply
must be those applicable to the most hazardous feature of construction
and occupancy.

COMMON FIRE CAUSES AND HOW TO AVOID THEM

Electricity:

The current running through the electric wiring is a source of heat and if
a fault develops in the wiring the heat can easily become excessive and
start a fire. In fact, neglect and misuse of wiring and electrical
appliances are the leading causes of fire. Any faults in the wiring must be
promptly and properly repaired. Most fires start with appliances, heaters
standing too near combustible materials. For example electric lamps get
very hot and fire could start if lamp shades or materials used in window
displays come into contact with them. Overloading of an electrical outlet
(for example many cables leading from one multi-pin plug), temporary
cable connections, etc. are a serious hazard and must be avoided.

Waste:
Waste such as cartons, packing materials etc. easily ignite and also serve
to spread fires quickly. Hence, premises should be cleared of waste
material as often as possible; at least once a day before closing time.
Another big danger is with the burning of waste material; often such fires
get out of control. If rubbish must be burnt, a proper incinerator must be
used away from buildings and storages and someone must stand guard
over it with fire extinguisher(s).

Smoking:
Discarded cigarette ends are still one of the most frequent causes of fire.
Smoking must be prohibited in storage and production areas. Clients
should be advised on this aspect and this should be made a condition in
the Policy.
 Page 32 of 75
[Property]

Dangerous Goods:
Commodities such as paints, adhesives or chemicals must be kept in a
separate storeroom and well away from any source of heat. Aerosols, gas,
cartridge and cylinders if exposed to heat can explode and start fires.

(B) Storm. Tempest & Flood

When considering to grant this cover, the following must be taken into
account:
- The building structure must preferably be of concrete. If the
building is other than concrete

i) the structure must be in good condition.

ii) the roof must be firmly fixed to the purlins.

iii) there must be no openings in the roof, walls or between the

roof and walls.

Note:Our wordings usually exclude leakages but each such

incident may end in a dispute and hence cover must not
be given until repairs are completed and checked.

- The building must be elevated from surrounding ground level.

Cover cannot be given ,to buildings situated in a low lying area or to
basements below ground level.

- Contents in warehouses which could be damaged by water should

be elevated on racks.

- Property in the open cannot be covered against STF unless such

goods were designed or manufactured to operate or be used in the.
open. STF cannot be given to moveable property in the open under
any circumstances.
- STF cover should be always subject to an excess, the level of which
will vary according to exposure.

(C) Bursting of Pipes/Water Damage

The age of the building must be considered. BP & WD cover for buildings
over 10 years of age should not be granted unless the building has been
renovated and the pipes changed. An excess must be always imposed for
this cover.
 Page 33 of 75
[Property]

(D) Impact
When granting this cover the proximity of the premises to neighbouring
roads and the access of third party vehicles to the premises must be
considered. Imposing an excess might be prudent particularly in the case
of business premises where there are frequent visits of third party
vehicles to the premises.
The standard Impact Clause excludes impact by vehicles belonging to or
under the care custody and control of the Insured. This restriction can be
waived subject to charging the proper additional premium and imposing
an adequate excess. Nevertheless .this facility should be given in
exceptional cases for important clients only.
Likewise the standard Impact Clause excludes damage to vehicles. This as
well can be deleted for important clients subject to charging proper
loading in premium and imposing an adequate excess preferably
applicable to each vehicle.

(E) Deletion of Electrical Clause

The value and nature of the electrical items must be ascertained to

determine the additional rate that should be charged. Whilst the loading
factor may be insignificant in the case of ^residences, warehouses, etc,
the additional rate may be high for industries or premises containing
many machinery. It is important to note that deleting the Electrical
Clause does not mean an electrical breakdown or short-circuit is covered.
A fire (which is not otherwise excluded) must take place.

(F) Aircraft Damage

This cover does not cause much concern except when considering risks
near to airports or landing fields. Where the premises are situated on the
approach path of aircrafts, it is advisable to avoid giving this cover.

(G) Explosion
When granting this cover, not only the existence of boilers on the
premises must be considered but also other sources must be investigated
such as:
1) The existence on the premises of highly flammable materials or gas
under pressure which might explode if exposed to heat.
Page 34 of 75
[Property]
 Page 35 of 75

2) The existence on neighbouring premises of boilers,

flammable materials or gas under pressure which might
explode if exposed to heat and how far are the
neighbouring premises to be insured.

The standard explosion endorsement excludes damage to the boiler

and pressure vessel which explodes and this exclusion might be
waived for non industrial premises only subject to payment of
adequate additional premium.

Damage to the boilers, pressure vessels etc. found in industrial

premises need careful consideration and it is always preferable to
consult us on such coverages.
(H) Earthquake

Can be given, but in view of the view of the wide impact of this
peril it is preferable not to canvass this business but you may give
it to clients who specifically ask for it at an appropriate additional
premium. Additional premium, a high deductible and more
important, a loss limit should be applied while covering this peril,
to make the exposure manageable and details of cover and
premium charged shall be reported separately.
(I) Strikes/Riots
Can be given subject to the payment of proper additional premium.

(j) Civil Commotion

Civil commotion can be given if "not assuming the proportion of or
amounting to a popular rising" subject to additional premium.
(K) Malicious Damage
Care must be exercised when giving this cover particularly with
respect to business premises. Where one deduces for one reason or
another that the firm or the directors are disliked by the employees,
neighbours or even by other firms, cover should be avoided.
 [Property]

(L) Smoke Damage

Can be given for premises which is properly maintained. Smoke damage
from fire places or industrial apparatus is excluded in the standard clause
wording.
(M) Rain Water Damage
Although the Wet Perils endorsement provides for rain water damage, this
cover should be avoided or given only with good additional premium and
excess. Clients should be cautioned that leakages or water entering
through openings (windows/doors) is not covered.

(N) Burglary
This extension must only be given after a careful study of the risk and the
precautions taken (locks, alarms, guards). Location plays an important
part since a premises on a main road is less riskier than one on side
streets which is still better than risks located in lonely areas
(warehousing complex). Rates must be charged considering these factors
as well as the nature of contents. Residences, offices, heavy machinery/
equipment premises are less exposed than fast moving goods
(supermarkets, camera shops, automobiles, home appliance showrooms,
etc). Warehouses must be avoided for granting this extension unless
there is 24 hours presence or security. Jewellery shops are to be referred.
A deductible, depending upon the nature of goods, helps eliminate small
losses or atleast reduces the overall claim.
IMPORTANT NOTES
1) The current wordings for the above perils are categorized under
three endorsements viz "WET PERILS", "OTHER PERILS", &
"POLITICAL PERILS". When granting all covers available under the
three endorsements, please ensure that adequate additional
premium is charged.

2) Any clauses other than our standard wordings must be referred to

and approved by us.
(0) All Risks Cover
All Risks Cover can only be given to business premises and in extremely
exceptional cases when asked by important clients. For acceptance and
rating all of the preceding enumerated perils must be taken into
consideration as they are automatically covered under the policy.
 [Property]

The main additional exposure which must be taken into consideration is

the accidental damage cover and hence it must be adequately assessed
and the proper additional premium charged for this. Rating alone is not
sufficient as imposing an excess is prudent in almost all cases - the
particulars of the business concerned 'would determine the level of excess.
The only wording acceptable to us is LM7 and ABI wording

(P) Business Interruption

Following a physical loss or damage the business enterprise might suffer
from reduction in its turnover. By definition:

Turnover = variable charges + net profits + standing

charges.

Gross Profit = Net profit + standing charges.

The variable charges are the charges which discontinue in case of a loss
and thus no longer constitute a burden on the business. As such,
variable charges are not insurable. On the other hand standing charges
are those which would continue to be paid or shouldered by the business
notwithstanding the fact that a loss has occurred. Such charges can be
covered. Likewise net profits not earned due to a loss occurrence
constitute a loss to the business and can be covered.

It is worth mentioning at this stage that the standard business

interruption cover applies only following a physical damage covered under
a direct damage policy and provided there is a reduction in turnover. No
reduction in turnover means no loss under the policy.

When insuring standing charges, and if the Insured's intention is to

insure only part of the standing charges, those charges intended to be
insured must be specified in the Policy. If not specified, then it would be
assumed automatically that all standing charges are covered and the
average clause will apply in case of underinsurance.

Depending on the particulars of the business to be covered, wages can

sometimes be a variable charge (for example daily contract workers) or
standing charge. It is normal for the wages to be insured separately and
there is a special wording for this.
 [Property]

The rate charged for business interruption depends on two main factors:

1) The Physical Risk.,

The Physical Risk governs the rate to be charged for business

interruption. The rate of the most hazardous aspect of the Physical
Risk is taken as the base rate for business interruption.
2) The Period of Indemnity

This is the second factor which affects the rate. There is a

percentage scale affecting the base rate according to the length of
the indemnity period and the indicative guiding rates are as follows:

3 months indemnity : 75 to 100% of the base rate

applicable on annual figures.

6 months indemnity : 100 to 110% of the base rate

applicable on annual figures

12 months indemnity : 125 to 150% of the base rate

applicable on annual figures.

18 months indemnity : 100 to 125% of base rate

applicable on 18 months figure.

24 months indemnity : 85 to 100% of base rate

applicable on 24 months figure.

N.B. Common sense must be used to decide whether the lower or

higher loading percentage indicated above is to apply. Where, in
your opinion, a lesser period than the indemnity period selected is
required to restore production and turnover to its normal level the
lower loading percentage will apply. On the other hand if the
indemnity period selected will be exhausted completely in case of an
interruption, the higher percentage will apply.

3) We would be reluctant to grant indemnity period more than 12

months unless full underwriting information is received.

4) Time deductible is essential with a minimum of 7 days.

 [Property!
UNDERWRITING AUTHORITIES

(A) Perils/Covers for which, you have to refer to SAICO:

- Burglary cover on its own without the relevant fire cover
- Business interruption covers.
- Property All Risks.
- Larceny, theft or burglary not involving violent and visible entry or
exit from the premises.
- Storm, tempest, flood for premises where construction is not good
with openings in walls or roof and where building is not elevated
from surrounding ground level. Also storage areas where racks are
not used for goods that can be damaged by water.
- Water damage/bursting of pipes for buildings which are more than
10 years old.
(B) Risks which you have to refer to SAICO:
- Oil refineries and petrochemicals.
- Plastic factories.
- Carpentries and furniture factories.
- Premises where thinners, paints or other flammable materials are
stored unless their value does not exceed 15% of total value.
- Storage of plywood, wood, timber, furniture and the like.
- Premises of wooden construction.
- Paper manufacturers/printing presses.
- Jewellery dealers or shops against burglary.
- Hazardous goods storage and/or manufacture.
- Warehouse risks on its own
- Industrial risks" where flammable or combustible raw materials are
used.
(C) Clauses to be compulsory in each Policy

- Electrical clause unless deleted by charging additional premium.

- War/nuclear exclusion clause.
- Underground water table exclusion clause.
- Sabotage and terrorism exclusion clause.
- Cyber risks exclusion clause.
- Subsidence exclusion clause.
The first 2 clauses are already incorporated in our policy and the third
clause is included in our Wet Perils Endorsement. Hence there is no need
to attach these separately again.
 [Property]

(D) Other Clauses

(i) Reinstatement Value clause : This clause is not to be granted

routinely and should be given only to large and important clients
with a good track record.

The reinstatement value clause is to be applied only to Buildings,

Plant & fixed machinery. It can in no case be granted for movable
assets, stocks of any kind, personal effects etc.

(ii) Neighbour's recourse / Landlord's recourse / Rent / Removal of

Debris : The limit insured under each clause should be stated
separately for each location / risk and the same must be added to
the Total Sum Insured. The agreed premium rate must be applied to
these limits.

(iii) Stock Declaration Clause : This clause can be granted to large

clients who need the facility in view of large-scale fluctuations in the
values of stocks covered.

The clause can be granted only if the Insured keeps up-to-date stock
records (and maintains a duplicate set away from the premises
covered). It is essential that the sum insured is adequate and
consistent with the existing stock records and that a separate limit
per location / independent storage is declared. Monthly
declarations per location as per the clause conditions must be
regularly submitted by the Insured.

Granting of a common combined Sum Insured limit for various

locations or a FLOATER COVER is not allowed and all such cases
must be referred.
 [Property]

(E) Binding Authority

The binding authority mentioned herein shall be calculated on the basis
of total sum ensured exposed for any one Insured or for any combination
of Insureds cumulatively on any one location.

The total sum insured is defined as the sum total of insured values of
buildings, machinery, contents, stocks, business interruption, removal
of debris, professional fees, neighbour's/landlord's recourse, etc.

Your maximum binding authority for risks of classification 1A is

KD.600,000 and for risks of other classifications, your binding authority
limit is reduced according to the percentage shown in the table:

BLDG. A B C
CONST. / RISK
GROUP % of Limils % of Limits % of Limits

1 100 85 NIL

2 80 70 NIL
3 60 50 NIL
4 NIL NIL NIL
5 NIL NIL NIL

Building Construction:
A - First class, mainly concrete block walls and concrete roof. If steel element
involved it should be coated with fire resistant material.

B - Mixed concrete and steel which is not coated by fire resistant material .

C- Construction not falling under A and B such as prefab. Construction of

wooden and corrugated sheets and the like.
 RISK GROUP [Property]

2 3 4
ART GALLERIES AGRICUL D A ALLUMINI S A E U RE
TURAL N UM I S R RS
BANKS AND THE LIKE IMPLEME E SMELTER E
HOSPITALS NTS D S/MANUF R RE
MINERAL
ICE CREAM FACTORIES FACTORI S ACTURIN AND C B TAI
ES G M
ICE FACTORIES D VEGETA R O LE
A A
MARBLE/STONEWORKS AIRPORT I AMUSEM BLE OIL RS,
ENT A O N
S STORAG
L S PARKS U W
OFFICES ASBESTO F K
A E F HO
S I BOUTIQU PLANTS T
FACTORI B ES A LE
RESIDENTIAL PREMISES B
ES L RESTAU C SA
(apartments, buildngs or N BROADCA
AUTO STING RANTS H I T
villas) SCHOOLS WATER E LE
SPARE A STATIONS A N U
D SANITAR RS
FACTORIES PARTS BUILDING R
Y N D
SHOWRO T S IN I &
OMS MATERIA G I
L COURSE N DI
I LS AND
BEVERAG I OF A N G ST
E PLANTS CONSTRU HARDWA
O B R G RI
CTIONfER RE
R S O BU
BUTTER ECTION SHOWR
N R
FACTORI A OOMS W TO
ES CANNERI S
R A O S RS
ES
CARPARK I H S R T
P CHEMI GREENHOUSES
S E P K O
CAL O R
L S H S
CAR CLEAN GRINDING
A
SHOWRO ING E A WORKS
A MANU G
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FACT E
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CEMENT URER S T FACTORIES
CONCRE S OF USING F FURNITUR
T / CABLE
HEAV NON- (COATED) E JUTE MILLS
TE T
Y HAZAR A FACTORY STORE/SH
ARTICLE S
DOUS A OWROOM MARINAS
MACH
S FACT. MATE C R CANDLE
INER G
CEMENT Y RIALS FACTORIES MATTRESS
DISPEN T A
SARIES MANUFACTURI
FACTORI MENTAL CIGAR/CI A CARDBOAR S NG
ES O
FOOD HOSPITALS GARETTE N D
CHEESE FACTOR MANUFACT PAINT
ffTOBACC R D W
IES METAL URING FACTORIES
FACTORI O O
I CARPENTRI
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FACTORIES FACTORI P ES PAPER
JUICE
COLLEGE E CARPET K FACTORIES
MANUF ES COLD I
ACTURI METAL TOYS FACTORIES S PERFUM
S STORES T
NG S CHROMING/
FACTORIES DRY C E
GALVANISIN
CO GfNICKELLI O MANUFA
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SM PASTRIES R
S NQ CTURING
S AND S
ETI WITHOU WORKSHOP
AND LAUNDRI W PETROCH
C T S
U S EMICAL
MA REPAIRS ES O
OOMFECTIO T
NU ELECTRI P R CLOTHING PLANTS
FA NAR1ES FACTORIES O
GLASS PETROL/
CAL/ELE K
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POWER CTRONIC S COAL BENZINE
URI IES A
HANDLING AND
NG S R
STATIONS RISKS G
EX GOODS SIMILAR
MANUFAC B E
IN OPEN M COFFEE
CL RECREATIO TURING A LOW
(NON- PEELING/RO
UD HAZARD A FLASH
EXCLUDI T ASTING G
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NG T WORKS A POINT
PE R
RF SEWAGE COMPUTE E S SPIRITS
HOTELS COMPUTER
UM K STORAGE
PLANTS RS R MANUFACTU /
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CRUSHIN FLOUR COTT I
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PLANTS I A G
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CUTLERY T S C ARATI PHOTOGRAPHIC
N
WORKS U MATERIALS FACTORIE T ON LABORATORIES
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WITHOUT T SLAUGHTER O WORK
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USE OF I HOUSES S S AND
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PLASTICS SUGAR STOR R
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N MANUFACTU E
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UNITS I
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FRUIT AND E
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I E PACKING I
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 [Property]

GOODS IN THE OPEN

Your binding authority to accept goods in the open is restricted to non

hazardous material -such as heavy machinery, cars, refrigerators, steel
pipes, iron rods and the like. This authority is for a maximum limit of:

A) KD.350,000 where the goods are packed in crates, cartons and the like.
B) KD.500,000 where the goods are not packed in crates or cartons.
Provided goods are stored in accordance with the notes for storage areas
appearing under Item 8 on pages 16 and 17 of this manual.
You are not authorized to give wet perils such as STF for movable goods that
can be damaged by water. On the other hand, property that are designed to
operate or be used in the open can be covered against STF.

FACULTATIVE REINSURANCE ACCEPTANCES

Subject to your binding authority limits and other instructions as mentioned
earlier in this manual, you are authorized to accept Facultative Reinsurance
business subject to the following :
1) The share accepted should not exceed the Ceding Company's retention and
it should not exceed your underwriting limits.

2) The original policy should contain a War/Nuclear Exclusion/ Sabotage and

Terrorism Clause which is at least as comprehensive as ours.

3) All instructions/guidelines mentioned in the earlier parts of this manual

under headings. "Underwriting" and "Perils Investigated" apply to
reinsurance business as well.
4) Regarding the extended perils, we would like to see our clauses used.
However, where this is not possible, the following features must be found in
the Ceding Company's wordings.

A) STF:
I) Losses occasioned by or through the leakage of roofs, or as a
result of doors, windows, or unprotected opening being left
open or in defective condition must be excluded.
 [Property]

II) Unless the building insured or containing the

Property insured shall first sustain actual damage to
the roof or walls by the direct force of storm or tempest,
the Company shall not be liable for damage to interior
of the building or the insured property therein by storm
or tempest.

(III) Water table exclusion.

B) Bursting of Pipes:

Damage to the pipes themselves must be excluded.

C) Impact:

Damage to vehicles or damage by own vehicles (or vehicles under

care, custody and control) must be excluded.

D) Aircraft Damage:

Sonic boom exclusion.

E) Explosion:
The standard explosion should exclude damage to the
boiler/pressure vessel itself and should include a War/Nuclear
Exclusion Clause "Identical to ours.

F) Strikes/Riots/Malicious Damage:

Should be identical to our clause. Sabotage/Terrorism cannot be

covered.

G) Civil Commotion:

Should exclude "civil commotion assuming the proportions of or

amounting to a popular rising".

H) Smoke Damage:

Should exclude smoke from fire places or industrial apparatus.

I) Rain Water Damage:

Same exclusion as STF should apply.

[Property]
J) All risks

The only wordings acceptable are ABI , and LM 7 (our policy). Following
must specifically appear in policy:

I. MBD must be excluded.

II. War/Nuclear Exclusion Clause which is at least as comprehensive

as ours must be used.
Anyway you have to refer such risks to us.

K) Business Interruption:
Wordings must be identical to ours and anyway this is a referral.

For any deviation from the above, please refer.

*************
 WORKMEN'S COMPENSATION

(A) BINDING AUTHORITY:

You can bind us for following policy covers :

1) Workmen's compensation as per Kuwait Labour Law -

The minimum net rate recommended is 0.325% for
administrative staff.

For labourers-, rate would follow their occupation. For example,

Carpentry workers - 1.50%, Construction Workers (on ordinary
building sites) - 1.00% etc.

For Salesmen/drivers/cleaning staff, the recommended minimum

rate is 0.75%.

For industrial workers, the rate would depend upon the degree of
hazard involved and therefore no indications can be given. The
minimum recommended net rate would be 1.00%.

2) Employers liability as per local jurisdiction -

The net rate should not be less than 0.25%. The Liability Limit
should not exceed KD.15,000 per employee and KD.150,000 per
occurrence.

For Workmen's Compensation cover as per country of hire/origin you

would have to refer to us for rating and acceptance.
 [Workmen's]

(B) OCCUPATIONS YOU CANNOT BIND

You may not bind us without our prior approval for occupations involving:
<
1) Manufacture, storage, filling, breaking down or transport of

a) Fireworks, ammunition, fuses, cartridges, powder, dynamites,

nitroglycerine, or any substance intended for use as an explosive.
b) Gases and/or air under pressure in containers.

2) Underground Mining

3) Quarries where explosives are employed,

4) Prospecting, extraction and refining of liquid or gaseous fuels.

5) Subaqueous or offshore works.

6) Construction and maintenance of tunnels, bridges, dams and coffer dams,
unless incidental to operations not otherwise excluded.

7) Construction of towers, steeples, chimney shafts and buildings over 30

meters high.

8) Operation of railways other than private sidings.

9) Shipbuilding, ship repair, port authorities and risks connected with docks
and wharves.

10) Crew of vessels.

11) Crew of aircraft.

12) Races of any kind, horse training, circus and amusement parks.

(C) GENERAL
For renewal of policies (other than for excluded occupations mentioned above)
you may automatically bind renewal provided the claims ratio does not exceed
80% (net earned basis). When the claim ratio of any policy touches or exceeds
80%, please refer to us two months prior to renewal to enable a review.
 [Workmen's]

There should be a minimum net premium of KD.50 per policy except.

policies where household servants are covered for which KD. 10(net) may
be applied.
Policies must preferably show the names of the employees with the wages
of each and this is essential when number of employees is less than 25.
Follow-up should be done at expiry (or preferably on quarterly basis) for
obtaining actual wages to adjust the premium on each and every policy.

NOTE : All rates/premiums indicated above are on net basis to SAICO

and would need to be loaded for ACE Commission.

**********
 ENGINEERING

This section comprises of the following :

- Contractors All Risks (CAR)

- Erection All Risks (EAR)

- Machinery Breakdown (MBD)

- Machinery Loss of Profits (MLOP)

- Computer All Risks/ Increased Cost of Working/ Data Media

- Boiler/Pressure Vessel Insurance

You need to refer all such risks to us for rating and acceptance. A detailed
proposal form with other available information must be submitted to enable us
quote.

GENERAL INFORMATION

CONTRACT WORKS - CONSTRUCTION

1) Buildings take many forms and use an extensive range of materials in a
variety of construction methods. This variety nevertheless has little
impact on the contract works risk overall and the Buildings category
remains amongst the most standard and favourable from an underwriting
and acceptance viewpoint.
2) Fire is a major and constant hazard in all types of building construction;
hence the presence and adequacy of fire prevention and control systems
and the efficiency of fire-fighting arrangements are important
underwriting features. This is usually neglected by most contractors.
3) The most effective safeguard against outbreak of fire is disciplined site
housekeeping.
4) During construction, fire prevention or control systems, e.g. fire breaks
(walls and floor levels), sprinklers and fire mains, may be incomplete,
often allowing a minor outbreak originating from normal site operations
to spread rapidly. Fire control systems should therefore follow closely
upon the advance of the construction work and, in the case of fire mains,
should be installed early in the programme.
 [Engineering]

5) As many buildings are erected in town or city centers on congested sites,

the only possible location for huts, temporary offices and material storage
is often within the partially completed framework. Even materials which
would normally be stored well away from the construction area are often
placed close to or even within the structure. Materials which are
susceptible tb damage from the elements may also be stored within the
lower floors. Timber and other inflammable materials, in addition to the
huts and temporary buildings, constitute a considerably increased fire
risk to the partially completed structure. It is not always obvious which
materials create an increased fire hazard because even non-combustible
items may be seriously damaged or destroyed by a fire originating in
packing materials.

6) For fire resistance, reinforced concrete framed buildings are preferable to

steel which distorts with heat. Single storey industrial-type buildings
where the roof, often incorporating inflammable materials such as
polystyrene insulation and bitumen waterproofing covering the whole of
the building area, presents a heavier fire risk as a roof fire is particularly
liable to spread rapidly throughout the whole structure.
7) Buildings with pre-fabricated frames such as steel or pre-cast concrete
are vulnerable to windstorm in their partially completed state; likewise
buildings with lightweight cladding, e.g. aluminum or asbestos sheeting,
may be affected by wind, even at an advanced stage of construction. This
vulnerability is enhanced in multi-storied construction where the placing
of component parts is particularly susceptible to windstorm. The
consequences of parts falling either by dropping or dislodgement, may be
serious also in terms of the possibility of damage to stockpiles,
contractors plant and third party property and persons.
8) A number of module-building schemes involving storage of units in the
open on site prior to installation are vulnerable to water damage,
particularly prior to the completion of roofing work. Most systems are
equally vulnerable to windstorm as conventional steel or pre-cast concrete
framed structure systems which have no skeleton frame but rely on inter-
locking panels are rather more vulnerable.
9) Apart from the above, all building work is susceptible to a wide variety of
mishaps. Some indeed, such as cross damage between finishing trades, is
almost inevitable and should be catered for by an appropriate basic
excess.
 [Engineering]

10) Where extensive under-building is involved e.g. underground car parks

and basements, the possibility of water damage from flooding, which may
arise from faulty operation of water supply or fire-fighting systems as
well as climatic conditions, should not be overlooked. Bursting of pipes
or failure of storage tanks can, of course, give rise to water damage on
upper floors.

11) The machinery installation component of major building projects can

form a significant part of the total contract value. The associated EAR
hazards tend to increase with the degree of complexity and
sophistication - heating, air-conditioning equipment, etc. They should,
wherever possible, be handled separately from a rating viewpoint.

CONTRACT WORKS - MAINTENANCE

1) Maintenance periods for buildings up to 12 months are standard and do
not normally give rise to serious underwriting difficulties, but
modern developments, increasingly constructed to be highly cost-
effective and economically competitive design standards, tend to exhibit
less durable characteristics. This latter feature suggests that requests for
extended maintenance cover should be viewed critically.

2) Failure of a major structural element of a building, particularly the

foundations, may give rise to indemnifiable damage, which may
nevertheless be recoverable by subrogation from the designers or piling
contractors (as the case may be), provided their interests are not
provided for under the contract works cover in question.

CONTRACTORS MACHINERY

The major item of plant employed in this category nowadays is the tower crane
which usually remains on site throughout a substantial part of the construction
period. They would normally be declared and valued as a separate item in the
plant list. In addition the works will embrace a wide range of standard
equipment from operated plant, such as mobile cranes and excavators, to non-
operated items, such as compressors, generators, welding machines, etc.
 [Engineering]

CONSTRUCTION PLANT AND EQUIPMENT (CPE)

When on site, construction equipment may be insured under the Policy. A

common misconception is that these are part of the contract value and therefore
automatically included with the project. This is not the case, since the
contractor usually takes these away after the work is completed and there is
some residual value even though the Contractor might have priced his bid
including these items. Examples of these are Jacks, Ladders, Mixing Plants
(asphalt and concrete), Planking, Barbenders, Pumps, Scaffolding, Site Camps,
Site Offices, Hoists, Tools, Water tanks, Woodworking and workshop machinery,
etc.

The sum total of the new replacement values of such equipment is to be

included in the policy.

OTHER EXTENSIONS
The CAR policy can be extended to also include

(a) Removal of Debris. Contract Works rate will apply on the amount fixed
and the sum insured can generally be between 5 to 10% of Contract
Value.

(b) Architects Fees. A reasonable limit can be fixed or included in contract-

value. If a separate "1imit is decided then the Contract Works rate will
apply.

***************
 EQUIPMENT ALL RISKS

This class of business has to be referred to us for rating and acceptance with
following essential information:

1) Previous claims experience.

2) Total values of the units and maximum value anyone unit.

3) Breakdown in values per category of equipment i.e. dozers, cranes,

shovels etc. A detailed list showing age, model, make, serial numbers,
value of each item would greatly assist in coming up with an accurate
rate.

4) Areas of operations, and type of jobs to be performed.

5) Cover required; whether own damage on site (Sect-ion I of our equipment

policy) or own damage off-site (Section III) or liability on/off site (Sections
II and IV).

Please note that we would be reluctant to grant cover for Liability On-Site
(Section II) as we believe that this risk is more appropriately insured under a
CAR/EAR Insurance. However, if the equipment is used within Insured's
own premises (for example, a factory or warehouse), then we would be inclined
to grant this cover.

*****************
 PERSONAL ACCIDENT

(A) RISKS YOU CANNOT ACCEPT OR RENEW WITHOUT REFERRING

01) Coupon insurance.

02) Racing, competition risks and sport teams.
03) Aviation risks except as fare paying passenger on scheduled
airline.
04) Naval, military or air-force service or operations.
05) Persons involved in political or military organization.
06) Motor cyclists.
07) Chartered flights, rallies and like events.
08) Persons under 16 and over 65.
09) Accumulations.
10) Sickness/illness insurance.
11) War Risks.
12) Employees working as (or in) vessel crew, underground
mining, divers, match factories, explosive factories, transport
or filling or manufacture of gas under pressure, etc.

(B) BINDING AUTHORITY

You may accept risks (other than those excluded above) up to a maximum limit as
specified hereunder for anyone person in respect of the following categories:

CLASS USUAL PROFESSION LIMIT

Those engaged solely in
A professional, administrative or clerical KD.5,000
duties.

Commercial travelers, superintendents,

foremen, outdoor salesmen and
B KD.3,000
persons in-similar occupations not
involving manual work.
Tradesmen, engineers, vehicle drivers,
housemaids and other persons in
C KD.2,000
similar occupation not engaged in
hazardous vocation.

Other vocations (not excluded) such a

D KD.1,000
labour, Construction Workers.
 [Personal]

Please refer for any higher limits or occupations other than those
mentioned above.
The rates to apply for above categories are:

BENEFITS ANNUAL RATES

CLASS A CLASS B CLASS C CLASS D

A. Death (Section I of our Policy) 0.70%o 08.5%o 1.25%o 1.50%o

B. Restricted Permanent 0.35%o 0.40%o 0.50%o 0.75%o

Disablement (Section 2 of our
Policy)

C. Permanent Disablement as per 0.80%o 1.00%o 1.25%o 2.00%o

continental scale (or as defined
in Section 3 of our policy).

D. Weekly compensation for 12.5%o 17.5%o 25.0%o Refer

Temporary Total Disablement.
Rate applicable on weekly
benefit (maximum 52 weeks)
(Section 4 of our policy),
E. Accidental Medical/Surgical 1.5%o 2.00%o 3.00%o 5.00%o
Hospital Nursing Home and
Nursing Fees or charges (not to
exceed 10% of death benefit)
(Section 5 of our policy).

Weekly indemnity (Section 4 of our Policy) can only be given to wage

earners and should not exceed 75% of the weekly income of the insured
person or 1% (pct) of the capital sum insured, whichever is less;
(C) SHORT PERIOD RATE SCALE
For short term-policies or where policies are cancelled midterm within the first
year of insurance, the following scale will apply :

PERIOD Percentage of Annual

Premiums to be charged
retained____ _______
Not exceeding 1 week 12.5%
Not exceeding 2 months 37.5%
Not exceeding 3 months 50.0%
Not exceeding 4 months 62.5%
Not exceeding 8 months 87.5%
Exceeding 8 months Full Annual Premium
 [Personal]

(D) GROUP DISCOUNTS

In cases where a s-ingle policy covers a group of persons, you may grant
a Group Discount on the annual premium charged as per the following
scale:

Number of persons covered Discount%

In excess of 10 persons 13%

In excess of 50 persons 20%

In excess of 100 persons 25%

In excess of 200 persons 30%

In excess of 500 persons 33%

(E) GENERAL NOTES

1. Death + Permanent Disablement (Restricted or Full) cover must be

first given prior to granting other covers i.e. Weekly Compensation
or Medical Expenses.

2. As a general rule for employees, the capital sum insured for an

individual should be around 24 months gross salary but should not
exceed 36 months gross salary. This may not be possible whilst
insuring

(a) Groups; all employees could be insured for a standard

amount
(b) Employees' spouses would be usually insured for the same
amount.

3. The Sum Insured for Permanent Disablement cover can be granted

for twice the SI for Death but should not, in any case, exceed your
Authorized Limits.

**************
 HOUSEHOLDER'S COMPREHENSIVE POLICY

This class of business which falls under our Property class of insurance may be
sold to individuals or groups. Our standard wordings must be used which is
designed primarily for rented residential premises, i.e. building or flat not
owned by the individual.

This Policy may also be extended to cover :

(a) Additional Rent :

Rent up to 10% of the sum insured on contents is already covered free of

charge. If this limit is not enough, the Insured has. the option to insure
his actual annual rent less the free limit for complete protection.

The contents rate will apply on the sum insured for additional rent .

(b) Tenant's Liability

Limit to be ascertained from the Insured on which 75% of the contents
rate shall apply.

(c) Neighbours Liability

Limit to be ascertained from the Insured on which 30% of the contents
rate shall apply.

Binding Authority

Contents : US$ 100,000

Additional Rent : US$ 10,000

Tenant's Liability : US$ 200,000

Neighbour's Liability : US$ 200,000

 [Householder's Comprehensive]

Rate and Minimum Premium

Applicable on the contents.

Option I : As per our standard wording (i.e. including theft)
Rate : Concrete Construction : 2.50%o
Others : 3.50%o
Option II : As per our standard wording excluding Theft
Rate : Concrete Construction : 1.50%o
Others : 2.50%o

Minimum Premium : US$ 50 per policy

Deductible
The printed wording includes a deductible for STF (US$150) only. Use your judgment
of the risk increase upon this or suggest an amount for each and every loss (say
US$250 to US$500).

Underwriting Considerations
Risk wise, this class of business does not pose much of a problem, except the peril of
theft.
There is usually a tendency on the part of the Insured to inflate the claim and
convincing the individual on the market value and average clause is a problem.
Invoices are usually not available which consumes time and money in adjusting any
loss.

A proposal must be obtained or at least a declaration in writing giving details of the

risk, sum insured, listing of contents where applicable and whether he needs any
extensions. Any previous loss history must be recorded. All information received
must be signed by the Insured seeking insurance.

Any previous loss - (whether insured or not insured) must be carefully studied by you
to decide if the risk or individual is worth insuring.

Policy wording specifies that valuables in excess of 20% of the contents subject to a
maximum of US$1,500 must be declared and listed in the Policy. Valuables in excess
of the policy limit must be referred for rating.

Any article which exceeds 5% of the value of contents must be specifically listed in the
Policy Schedule.

*******************
 MISCELLANEOUS CLASSES

(A) PUBLIC LIABILITY

You are authorized to accept up to KD.300,000.00 in respect of
premises risks only for residences, offices and small commercial
risks which involves the sale of ordinary non-hazardous materials
provided:

1) Our standard liability policy to be used.

2) Risks must be claims free.

3) A suitable excess to apply to TPPD losses (say KD.100.00 at least).

4) Cover should be subject to local jurisdiction clause.

The PL Policy covers liabilities to third parties including neighbours

(other than the Insured). Property in charge, custody and control (for
example rented premises) are not considered as third parties and must
be covered under a property policy.

Rating indications for such simple risks are :

 Liability Limit Net premium
KD 50,000 KD.50 to KD.70
KD 100,000 KD.75 to KD.100
KD 150,000 KD.100 to KD.150
KD 200,000 KD.150 to KD.200
KD 300,000 KD.250 to KD.275
KD 375,000 KD.300 to KD.350

For risks other than the premises as described above and for all other
liability risks, you would have to refer to us.

(B) FIDELITY GUARANTEE:

You are authorized to accept KD. 10,000 per person and KD100,000
per occurrence per firm provided :

i) Acceptance is accommodation to other business.

 [Miscellaneous]

ii) Policy should be subject to following

- Warranted passports are kept with employer.

- Names, job title and limit for each to be stated in the policy.

- Warranted adequate internal control measures are taken with

no one person being allowed to do any transaction fully on
his own without the intervention of another person.

- Clean loss record.

iii) You cannot insure airline/ticketing agents, financial institutions,

Money changers, jewellers and similar high exposure risks.

iv) Proposal form must be obtained.

v) Recommended rate at the least is 0.40% (or 0.35% with a

deductible of KD.450.00 EEL) however we urge higher rates if
possible.

vi) An annual aggregate limit, usually the per occurrence limit, to be

introduced.

(C) CASH IN SAFE. CASH IN TRANSIT:

You are authorized to accept up to KD.25,000 for CIS (any one safe(s) at
one location) and KD.25,000 any one carrying for CIT provided:

1) Risks are claim free.

2) CIT are within the Kingdom of Saudi Arabia.

3) CIT rate must always be based on turnover and policy should

clearly specify from where to where the cash is being carried.

The estimated annual carrying (turnover) should be carefully

ascertained and should be consistent with their operations as well
as with the carrying limit sought.

4) For CIS, the safe should weigh not less than 1OOkgs and should be
located in a building of first class construction. When the weight
cannot be ascertained, the dimensions, which are to be specified in
the policy particularly the thickness of the door, must be
ascertained to satisfy ourselves that the safe is of reasonably heavy
weight. Details of each safe and its exact location must be obtained
and mentioned in the policy.
 [Miscellaneous]

5) Minimum recommended rates are

(a) CIS : 0.30% (per cent) on total limits of a11 safes

(b) C I T : 0.30%o (per mille) on estimated annual carryings

6) Following warranties are compulsory whilst covering CIT

(a) Minimum 2 persons (one of whom is a senior officer) must be

present when CIT exceeds KD.8,500.00

(b) Minimum 3 persons (one of whom is a senior, officer) must be

present when CIT exceeds KD.21,000.00

(c) Money should not be left unattended at any time and must
not be left in the boot of the car.

(D) BANKER'S BLANKET:

We do write Bankers Blanket policies following a recognized London lead

but you have to refer to us for such acceptance.

(E) OTHERS

Please refer to us any other class of business not mentioned in this

manual for our consideration.

****************
 MARINE CARGO
(A) BINDING AUTHORITY:

Your binding authorities per anyone policy are

i) Sea and Air : KD.100,000

i1) Truck : KD.30,000

iii) Train : KD.50,000

Subject to maximum known accumulation of KD.600,000 for anyone

bottom/location.

(B) LIMITATION PER CLASSIFICATION OF COMMODITIES

The coverage should be limited to Clause (C) only for bagged cargo and
Clause (C) + N.D. for the following commodities:
1) Goods in bundles
2) Plate glass and asbestos sheets
3) Eggs
4) Sanitary ware, porcelain, ceramic or tiles
5) Cement c1inker
6) Mild steel, pipes (all sort)
7) Crude/fuel oil, gas oil or liquefied petroleum gas (LPG)
8) Fish meal
9) Catch
10) Jewellery
11) Fresh or chilled meat/poultry/fish
12) Coal/coke
13) Prefabricated houses.

For cover wider than Clause (C) please refer to us before accepting risk.

(C) UNDERWRITING INSTRUCTIONS

You have to strictly abide with the following:

1) Shipments by land - Truck or Train - to be restricted to L.T.C. only.

For All Risks cover please refer.
 [Marine Cargo]

2) Shipments by launches, dows and/or vessels under 1000 GRT not

to be insured for wider cover than total loss following total loss of
vessel.

3) Non-containerised cargo shipped on deck not to be insured without

our prior approval.

4) Period of insurance after discharge not to be extended without our

prior approval.

5) Transhipment held covered at additional premium of 15% to 25%

of the original marine rate.

6) Overage premium should be charged in accordance with the

Institute Classification Clause and the Advisory Schedule.

7) Minimum premium per policy should not be less than KD. 4.500

8) Rate for cover per Clause (C) must not be less than 0.125% without
our prior approval.

9) Rate for cover per Clause (C) + ND must not be less than 0.175%
without our prior approval.

10) Shipments where the origin/destination of the shipment is other

than the country where the policy is issued should be reported to
us before accepting the risk.

11) At anytime the loss ratio of anyone MOC exceeds 65% you should
notify us before renewal.

(D) EXCLUSION LIST

You cannot insure the following:

1) a) War Risks on Land.

b) War Risks (waterborne) without cancellation clause.

c) War Risks to Lebanon without our prior approval.

2) Excess of Loss Insurance

3) Obligatory reinsurance, pools and pooling arrangements

4) Hulls of vessels or aircrafts (Time or Voyage) unless carried as

cargo.

5) Disbursements.
 [Marine Cargo]

6) Ocean tows or any description or interest written as such.

7) Contingency risks.

8) Confiscation/rejection risks.

9) Livestock and Bloodstock

10] Storage other than in conjunction with a marine transit.

11) Cargo towed on dumb barges, unless accepted for commercial

reasons and our prior approval is taken.

12) Policies including erection risks.

13) Timber, unless shipped under deck.

14) Containers written as such.

15] Goods Loaded on Wooden vessels and sailing vessels with or

without Motor

16] Shipowner’s interest and freight

17] Any shipment on board of old vessels not applying overage

scale and any not classified vessel

If cover is required for any of the above exclusions, please refer to

us with full details for our consideration.

***************
 GROUP LIFE and MEDICAL

This class of business has to be referred to us for rating and

acceptance with the following essential information:

(A) GROUP LIFE

1) Nature of business of the company or concern proposing group

insurance for its employees.

2) A list of the employees to be covered mentioning the Dates of

Birth and the occupations/ designations.

3) The salaries/wages of each employee proposed, if the Sum Insured

desired is related to their salaries.

If different levels of Sums Insured in accordance with occupational

classification are required; then the Sum Insured should be clearly
mentioned for each category.

(B) GROUP MEDICAL

Every referral for Group Medical Insurance should be accompanied

by the duly completed Questionnaire (copy enclosed).
 QUESTIONNAIRE FOR GROUP MEDICAL INSURANCE

1) Limit required ____________________________________________

2) Number of employees _________________________________________

3) Number of dependents ___________________________________________

4) Dates of birth of dependents and employees whose ages are more than 44 years.

______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________

5) Dates of birth of all wives and number of children against each wife, if pregnancy and
childbirth benefit is required.

______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________

6) Nature of employer's business (Please attach a list of individual occupations).

______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________

7) Breakdown of Nationalities.

______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________

8) Information whether the group is insured under Workmen's Compensation or G.O.S.I.

_____________________________________________________________________________
9) Claims experience for at least past two years plus information of any major claims, even if the Group
was not insured, details of medical expenses payments made during the past two years versus
number of persons involved in each particular year.

_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
___

10) Please select one option of the following compulsory deductibles/co-insurances to be imposed In
and Out-Patient expenses.

a) Co-Insurance 20%

b) Co-Insurance 10%

c) Excess : ___________ per person per year.

d) Excess : ________ each and every loss.

Signature : _________________

Designation :_________________

Place :_________________

Date :__________________

Company Stamp:____________________________