Chapter III : ADMINISTRATIVE ORGANIZATION

ARTICLE (9)

1. The Organization shall administer the social insurance and implement the provisions of this Law.  It shall be a legal entity, enjoy administrative and financial independence and be guaranteed and controlled by the State.

2. The administrative agencies of the Organization shall comprise Head Office in Riyadh and offices to be established, as needed, throughout the Kingdom by decisions of the Board of Directors.

3. The Organization may, by decision of the Board of Directors, establish or participate in establishment of companies or acquire private investment units on full ownership basis and shall manage its investments in accordance with the same business practice of management of similar investments in private sector and in conformity with the Regulations to be issued by the Board of Directors of the Organization.

ARTICLE (10)

1. The Organization’s Board of Directors shall be composed of eleven members including Chairman and the Vice-Chairman, as follows:

- Minister of Labour and Social Affairs, Chairman

- Governor of the Organization, Vice Chairman

- Three members representing Ministry of Labour and Social Affairs, Ministry of Finance and National Economy and Ministry of Health, and each such members shall be nominated by the Minister concerned provided that the nominated member shall not be lower than grade 14.

- Three members form among the contributors to the scheme who are highly qualified in their work.

- Three members from among the employers.

2. The Board members, excluding the Chairman and the Vice Chairman, shall be appointed by resolution of the Council of Ministers on the recommendation of the Minister, and their term of membership shall be three years only.

3. The Board shall hold at least one ordinary meeting every three months upon convocation by the Chairman or Vice Chairman.  The Board may also be convoked for a meeting upon a request made by at least seven members.  Decisions shall be made by majority vote in the presence of at lest seven members.  In case of equal voting, the opinion of the side comprising the Chairman shall be taken, provided that in all cases, the number of members voting in favour of the decision shall not be less than four.

4. The Board may call experts or specialists to attend its meetings without having the right to vote.

5. Remunerations for the Chairman, Vice-Chairman, and the rest of the members shall be fixed by the resolution of the Council of Ministers on the recommendation of the Minister and paid from the Organization’s budget.

6. The Board shall lay down its own rules of procedures in conformity with the provisions of this Law.

7. The member of the Board of Directors shall be disqualified in any of the following cases :

a. If he does not attend four consecutive Board meetings without an acceptable excuse, or it becomes impossible for him to attend to the basic duties of his office for six consecutive months.

b. If he is sentenced to a penalty for a financial crime or for a crime affecting honor or public interest.

c. If any of the employer’s representatives is declared bankrupt.

In all cases, the membership disqualification shall be announced by decision of the Chairman of the Board of Directors.

ARTICLE (11)

The decisions which are made by the Board of Directors under the chairmanship of the Vice-Chairman and require, by virtue of the Law, approval by the Minister, shall be referred to the Minister within eight days from the date of issue thereof.  If, within fifteen days from the date of such referral, such decisions are not approved by him, they shall become effective.  The Minister may, within the said period, remand to the Board of Directors decisions which are not approved by him, showing the reasons for disapproval thereof, provided that the remanded decisions shall be placed on the agenda of the following Board meeting, and such decisions shall become effective if at least seven of the present members vote in favour thereof.

ARTICLE (12)

The Board of Directors shall have the following prerogatives:

1. Supervising the implementation of the Law and Regulations, achieving the objectives of the Law and improving the Organization’s work progress.

2. Approving the organizing and implementing regulations.

3. Proposing the application stages in accordance with the provisions of Article (6) hereof and the institution of new insurance branches.

4. Approving establishment of the Offices of the Organization

5. Approving the accounting plan, the balance sheet, the financial report and the final account of the Organization.

6. Announcing the Organization’s annual financial position and investment activities.

7. Devising and approving the general plan for the investment of the Organization’s funds and approving the fields of investments which it deems useful for the employment of such funds within the framework of the said plan.

8. Expressing its opinion regarding any matter referred to it by the Board Chairman or Vice-Chairman.

9. Performing such other duties as may be entrusted to it by virtue of the provisions of this Law or the Regulations issued in implementation of the provisions hereof or any other legislative provision.

10. Accepting donations and bequests.

ARTICLE (13)

1. The affairs of the Organization shall be managed by a Governor who shall be designated by Royal Decree on the recommendation of the Minister.

2. The Governor shall:

a. represent the Organization before the court and other agencies and may authorize such other persons as he may wish to do so;

b. implement the decisions of the Board of Directors and shall directly report to such Board; and

c. manage the interests of the Organization and supervise its employees, handle its administrative and financial operations which fall within his jurisdiction and ensure the proper progress of its business.

3. The Governor  may delegate some of his prerogatives to his assistance or other employees of the Organization.

ARTICLE (14)
 
1. There shall be formed a Control Committee composed of a Chairman and two members. The Chairman of this Committee shall be designated by the Minister.  One of the two members shall be designated by the Minister of Finance and National Economy, and the other shall be designated by the Governor of the Saudi Arabian Monetary Agency. The term of office of the Committee shall be two years and may not be renewed for more than two consecutive times.

2. The Committee shall perform the following functions:

a. To control the works of the financial management of the Organization

b. To ensure the proper procedures followed in the investment of the funds of the Organization.

c. To express the opinion in respect of the Organization’s annual budget and account prior to presentation thereof to the Board of Directors and to ascertain the statutory and genuine contents thereof.

d. To examine the Financial and accounting system and the accounting plan and propose development thereof.

e. To evaluate the internal auditing system of the Organization.

f. To verify the correctness of the accounting books.

g. To exercise such other prerogatives as may be entrusted to it by the Minister.

3. The Committee shall, at the end of the sixth month  of each fiscal year, prepare a report showing its remarks on the Organization’s activities in the last six months and shall, at the end of the fiscal year, prepare an annual report.  The Committee’s report shall be presented at once to the Minister, Board of Directors and Governor of the  Organization.

4. For the proper performance of its functions, the Committee shall be assisted by a number of specialized employees who will be attached to it by the Governor in response to the request of the Chairman.  Such employees shall remain responsible solely before the Chairman throughout the period of their assignment with the Committee.

5. The Committee shall draw up its own rules of procedures.

6. The remunerations of the Committee members shall be fixed by the Minister.

ARTICLE (15)

1. The Board of Directors shall, on the recommendation of the Governor, determine the organizational structure of the Organization, including the numbers, categories, grades and salaries of the employees.

2. The Board shall issue employment regulations that determine the conditions governing the appointment, discipline and termination of the services of the employees of the Organization and set forth their rights and duties.

ARTICLE (16)

1. The Minister shall exercise the state control over the Organization and may, in addition to his powers and prerogatives provided for in this Law and its Regulations, request the Organization to give him all necessary information and to place at his disposal such books, files and documents as he may deem necessary to exercise this control.

2. To achieve the same purposes, the Organization shall, at the end of each year, submit to the Minister a report on the works performed in that year.