UK: Regulation Watch: GCC Insurance Sector

Last Updated: 27 April 2011
Article by Wayne Jones

Previously published in the MENA Insurance Review

UNITED ARAB EMIRATES

Insurance Authority

Title

Status

Summary

Insurance Authority Board of Directors Resolution No. 4 of 2010 - Takaful Insurance

In force from 29 July 2010

The Insurance Authority (IA) has published resolution No. 4 of 2010 concerning Takaful Insurance.

The Takaful Regulations provide for the establishment of a Supreme Committee for Fatwa and Shari'a Supervision within the IA that is empowered to issue rulings on Shari'a issues binding upon the Takaful operators in the UAE.

The Takaful regulations provide that Islamic insurance shall be undertaken using either a wakala or combined wakala / mudaraba model. A Takaful subscription agreement is to be issued to policyholders as distinct from the Takaful policy describing the insured risks.

Takaful operators are required to establish a Shari'a Supervisory Committee comprising 3 scholars who satisfy the eligibility criteria specified in the Takaful regulations. The members of the board of another Takaful operator. The operator must also appoint a Shari'a controller to monitor and audit the operations.

Conventional insurers are not permitted to operate Islamic windows for the sale of Takaful products.

Insurance Authority draft regulations concerning Instructions on Licensing, Regulating and Monitoring the Business of  Health Insurance Claim Management Companies

Draft for consultation

Insurance Authority Board has published the Directors Resolution  No. ( ) of 2010 regarding Instructions on Licensing, Regulating and Monitoring the Business of  Health Insurance Claim Management Companies.

The regulation proposes that the activities of 'health insurance claim management' be regulated by the Insurance Authority, and that entities wishing to undertake these activities, which include claims administration and payment, underwriting services  and other back office functions for health insurers, be required to register with the Insurance Authority.  The draft requirements include a capital requirement of AED5m, registration as a local UAE company (i.e. not in the UAE Free Zones), and set out a comprehensive list of obligations to be observed by health insurance claim management companies.  There is no deadline specified for comments to be received.

Insurance Authority draft regulations concerning marketing the insurance policies through the banks

Draft for consultation – circulated on 4 January 2011 The period for comments and responses ends on 11 April 2011.

The Insurance Authority (IA) published its draft regulations regarding marketing the insurance policies through the banks in January 2011.

The draft regulations provide that: (i) the bank must obtain approval from the UAE Central Bank to market insurance products; (ii) the insurer must obtain approval from the IA to enter into a distribution arrangement with a bank; and (iii) the distribution agreement must be registered with the IA. Existing distribution arrangements with banks are valid until 12 months after the implementation of the draft regulations. Banks may only distribute certain specified classes of retail insurance products and may not be involved in the issuance of policies or the settlement of claims. Either the bank must employ staff qualified in insurance business or the insurance company must second staff to the bank. The insurer must also provide training to the bank's staff. The draft regulations also provide that any distribution agreement between a bank and an insurer must include certain specified provisions.

Insurance Authority Board draft decision  concerning instructions pertinent to the basis of investing the rights of policyholders

Draft for consultation

The Insurance Authority (IA) published its draft instructions relating the investment activities of insurers in January 2011.

The draft instructions provide general principles applicable to the investments of insurers and focus on the need for insurers to ensure that their assets are adequately diversified. They require that insurers establish an investment department, develop investment and risk management policies and establish procedures to monitor compliance with these policies. Separate investment strategies are required for life and general insurance business. The instructions include asset distribution and allocation limits for different types of investments. Investments in derivatives are permitted only for legitimate hedging purposes. Investments in assets outside of the UAE must not exceed more than 20% of the investment portfolio. Investment activities may be outsourced to a third party provider.

Insurance Authority draft instructions concerning the calculation of the solvency margin and minimum guarantee fund of UAE insurance companies.

Draft for consultation – circulated on 8 January 2011 The period for comments and responses ends on 11 April 2011.

The Insurance Authority (IA) has published its draft instructions on the calculation of the solvency margin and minimum guarantee fund of UAE insurance companies. The instructions confirm that the minimum capital for insurers in the UAE is the higher of: (1) AED 100 million and AED 250 million for reinsurers (as was previously provided by Federal Law No. (6) of 2007); and (2) one third of the solvency margin. Any default on these minimum capital requirements is to be rectified within 60 days and the IA may suspend the licence of any insurer who does not satisfy the minimum capital requirements.

The solvency margin is to be calculated by reference to the quantifiable risks to which the insurer is exposed in respect of existing business and business anticipated to be written in the following 12 months. The instructions specify a detailed list of the quantifiable risks, including underwriting risk, investment risk, credit risk, liquidity risk, and operational risk. However, no detailed methodology is provided into the risks as to how these risks should be quantified.

Insurers are required to submit solvency information (as specified in the instructions) on an annual basis and as otherwise rquired by the IA. The instructions also provide that insurers must have a documented risk management framework including risk management policies and procedures and stress testing framework.

Insurance Authority draft instructions concerning the calculation of technical provisions by UAE insurance companies.

Draft for consultation – circulated on 4 January 2011 The period for comments and responses ends on 11 April 2011.

The Insurance Authority (IA) has published its draft instructions on the calculation of technical provisions by UAE insurance companies. The draft instructions provide details of the methodology to be used by insurance companies when calculating their technical provisions in respect of Unearned Premium Reserves, Unearned Risk Reserve, Outstanding Loss Reserves, Incurred but not Reported Reserves, Unallocated / Allocated Loss Adjusted Expense Reserves, Actuarial Reserves and Catastrophic Risk Reserves. Insurers are required to report their technical provisions on a quarterly basis to the IA and to submit an actuarial certification and Board of Directors certification to the IA on an annual basis.

The instructions require that each insurer appoint an actuary accredited with the IA to assess the quality of the data used for calculating the technical provisions. The actuary is responsible for reporting exceptional and significant risks to the Board of Directors of the insurer. The methodology used by the actuary to calculate IBNR is required to be approved by the IA. This methodology is to be consistent from year to year.

DUBAI FINANCIAL SERVICES AUTHORITY

DFSA Consultation Paper No. 73 concerning the regulatory policy and process sourcebook and enhancements to DFSA's rulebook

Consultation period ended on 17 January 2011.

The Dubai Financial Services Authority (DFSA) issued Consultation Paper No. 73 (CP) in December 2010.  The CP describes the manner in which the DFSA intends to introduce enhancements to the DFSA's Rulebook. The CP sets out a new Regulatory Policy and Process Module (RPP), which effectively proposes to incorporate the provisions previously found in the General (GEN), Authorisation (AUT) and Supervision (SUP) Modules of the DFSA Rulebook into one new RPP Module.  The consultation period ended on 17 January 2011.  The DFSA has indicated that it is currently reviewing responses, and will publish formal amendments in due course.

DFSA Signatory to IAIS Multi-lateral Memorandum of Understanding

Signed and in effect from on 3 November 2011.

The Dubai Financial Services Authority (DFSA) has been accepted as a signatory to the IAIS Multi-lateral Memorandum of Understanding (MMoU).

The MMoU is a framework for co-operation and the exchange of information between insurance supervisors to facilitate effective oversight of insurance and reinsurance companies which are active in more than one jurisdiction. It sets minimum standards to which signatories must adhere and these include the purposes for which information provided by another insurance supervisor can be used and the confidentiality of information received. The DFSA is the only regulator in the GCC, and the first in the Arab World, to be admitted as a signatory.

KINGDOM OF SAUDI ARABIA

Saudi Arabian Monetary Agency

Saudi Arabian Monetary Agency draft regulation concerning investment

The draft investment regulations were issued on 16 January 2011, and responses are requested 60 days after this date.

The Saudi Arabian Monetary Agency (SAMA) has published the draft Investment Regulation to be implemented by insurance companies and reinsurance companies in Saudi Arabia.

The draft Investment Regulation contains general principles and standards that should be met by insurance companies, including branches of foreign insurance companies, and reinsurance companies licensed by SAMA to manage their investments.

Saudi Arabian Monetary Agency  draft regulation concerning Online Insurance Activities for insurance companies, insurance brokers and agents

The draft regulations were issued on 16 January 2011, and responses are requested 60 days after this date.

The Saudi Arabian Monetary Agency (SAMA) has published the draft of Online Insurance Activities Regulation for insurance companies, insurance brokers and agents.

This draft regulation specifies the requirements and provisions for conducting insurance activities by insurance companies, insurance brokers and agents over the internet. The draft regulations applies to all online insurance activities conducted by insurance companies, insurance brokers and agents licensed according to the Law on Supervision of Cooperative Insurance Companies promulgated by Royal Decree M/32 dated 2/6/1424 H.

Saudi Arabian Monetary Agency draft regulation concerning insurance intermediaries regulation

The draft regulations were issued on 11 February 2011, and responses are requested 60 days after this date.

The Saudi Arabian Monetary Agency (SAMA) has published regulation concerning insurance intermediaries.

The draft regulation specifies the principles and minimum standards that should be met by insurance agents and (re)insurance brokers when dealing with insurance companies and their existing and potential clients.

Saudi Arabian Monetary Agency  regulation concerning Reinsurance activities

Published in October 2010

The Saudi Arabian Monetary Agency (SAMA) published in late 2010 the new Regulation of Reinsurance Activities (the Reinsurance Regulations), which had previously been published in draft at the end of 2008. The Reinsurance Regulations must be read in conjunction with the Law on Supervision of Co-operative Insurance Companies and its implementing regulations.

The Reinsurance Regulations provide the "general principles and standards" applicable in relation to reinsurance in Kingdom of Saudi Arabia (KSA).  The Reinsurance Regulations apply to all insurance and reinsurance companies and to "insurance related service providers" (including insurance and reinsurance brokers). 

The Reinsurance Regulations need to be read in conjunction with the Insurance Law and the Implementing Rules of the Control of Cooperative Insurance Regulations 2004 (the Implementing Regulations).  It remains the position, pursuant to the Implementing Regulations that insurance companies in KSA must retain not less than 30% of the total written premiums and cannot cede more than 40% of its premiums to reinsurers outside of KSA without SAMA approval.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions