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The Subrogation Contract is essential in Saudi Arabian insurance practices when an insurer seeks to recover payments made to an insured party from a third party responsible for the loss. This document becomes necessary after an insurance claim has been settled and the insurer wishes to exercise its right to pursue recovery from the at-fault party. The contract must carefully balance conventional insurance practices with Islamic financial principles, as required by Saudi law. It typically includes detailed provisions about the original incident, claim settlement, transferred rights, and cooperation requirements. The document must comply with the Saudi Insurance Law (Royal Decree No. M/32), SAMA regulations, and receive approval from a Shariah Advisory Board. It serves as the primary legal instrument enabling insurers to pursue recovery rights while maintaining compliance with both civil and Islamic law requirements.

1. Parties: Identification of the insurer, insured party, and any other relevant parties to the subrogation agreement

2. Background: Context of the insurance claim, incident details, and basis for subrogation

3. Definitions: Key terms used throughout the agreement, including specific insurance and subrogation-related terminology

4. Subrogation Rights: Detailed description of the rights being transferred from the insured to the insurer

5. Payment and Settlement: Details of the insurance payment made and settlement terms

6. Cooperation Obligations: Insured party's obligations to cooperate in pursuit of subrogation claims

7. Documentation Requirements: List of required documents and evidence to support the subrogation claim

8. Shariah Compliance: Specific provisions ensuring compliance with Islamic law principles

9. Representations and Warranties: Statements of fact and guarantees by both parties

10. Governing Law and Jurisdiction: Specification of Saudi law application and jurisdiction of Saudi courts

11. Notices: Communication procedures between parties

12. Entire Agreement: Integration clause confirming the complete terms of the agreement