The Insurance Authority has adopted BOD Resolution No. 3 of 2010
in the form of directives pertaining to the Code of Ethics &
Professional Practice for Insurance Companies
("Insurers") operating in the UAE.
The Resolution consists of sixteen articles as summarised
below.
Article 1 sets out the definitions.
Article 2 confirms that the Decision shall apply to all companies
registered with the Authority and operating in the UAE.
Article 3 consists of general provisions that introduce new
obligations on Insurance Companies in relation to ensuring that
their business and dealings are conducted in good faith; in an
environment of disclosure and transparency where best practices are
followed and relevant information is relayed clearly and concisely
to clients in proper legal terms. Insurers cannot decline an
insurance application or refuse to renew an insurance policy or
discriminate between insureds without good reason.
The Article prohibits insurance companies from dealing with any
person or entity whose professions are related to insurance, which
is not licensed by the Authority. Insurance companies should fully
comply with the terms of compulsory insurance policies and take the
appropriate steps to enforce anti-money laundering directives; to
ensure that insurance policies are made in the Arabic language
which is to prevail if there is any conflict in interpretation with
any other version of the policy. The Article also instructs
insurers to circulate those directives to their staff.
Article 4 deals with the obligations of insurers when providing
their products to clients. Insurers are obliged to answer client
queries in a professional, concise and prompt manner, issue
insurance policies as soon as is practically possible after
reaching agreement, raise awareness amongst the insured on how to
prevent accidents and mitigate their effects, provide access to all
documents and information to which the insured are entitled and
provide clients upon request with statistics on the results of
their transactions with insurers.
Article 5 defines the obligations insurers have to price their
insurance products in accordance with accepted technical standards,
pursue a balanced approach, provide detailed pricing reports
itemising all fees and taxes, comply with the compulsory insurance
pricing regime and notify the Authority of the pricing scheme the
company intends to apply.
Article 6 explains the requirements pertaining to the insurance
application form in terms of the questions having to be phrased in
clear and comprehensible terms and having to include questions
relating to the material facts to which companies give special
consideration when deciding to accept risk. In addition, the form
must include a warning about the legal consequences of providing
inaccurate information materially related to a claim and such
information must be filled out by the client and not by any of the
employees of the insurer. The application should state that the
information has been filled out by the applicant and that the
signature on the application is the signature of the applicant or
his legal representative. The application must also advise the
applicant to keep all documents and communications between himself
and the company and instruct the company to furnish the client with
a copy of the insurance application for his records.
Article 7 deals with the insurers obligations when preparing the
insurance policy in terms of having to use clear legal language to
avoid misunderstanding and the policy having to be clearly printed
and legible with each term printed in a conspicuous manner if
related to an event that would render the contract void or lead to
denial of the insurance claim.
The arbitration clause must be drafted in the form of a special
agreement that is separate from the general conditions printed in
the insurance policy which is to comprise all the terms and
conditions, including, inter alia, the number of pages and
annexures, a precise description of the subject matter and sum
insured, guidance on the procedures to be followed upon occurrence
of an insured event, a specific deductible clause and a prominently
displayed termination clause.
Article 8 deals with the insurers obligations when renewing an
insurance policy in terms of having to notify the client upon
renewal and sending notice of impending expiry of the insurance
period and alerting the client of the necessity of notifying any
changes to existing information.
Article 9 explains the claims procedure and how insurers are to
handle claims in terms of the process, the preparation of forms,
the documents that are to be submitted, the period for deciding
claims and doing so in accordance with the law and the terms of the
policy, keeping the beneficiary apprised of developments in regard
to his application, paying out promptly or giving precise reasons
for declining the claim and maintaining a file for each claim for
audit purposes.
Article 10 is dedicated to the register of complaints which
insurers are required to maintain to record client
complaints.
Article 11 addresses insurers responsibilities for compliance with
the requirements for integrity, honesty and objectivity when
issuing notices, bulletins and statements to the public
Article 12 addresses insurers compliance requirements in relation
to notices pertaining to the insurance of persons and accumulation
of the funds operations.
Article 13 states that insurers must ensure transparency and
professionalism in dealing with authorities and official
bodies.
Article 14 urges insurers to settle their accounts to ensure the
smooth operation of the insurance market and to resolve their
disputes by amicable means or through the Emirates Insurance
Association before approaching the Courts.
According to Article 15 these Directives are set to replace the
existing rules governing the operation of insurers in the UAE
insurance market promulgated by Ministerial Decision No. 296 of
2004.
According to Article 16, the Directives are to take effect 3 months
after publication and were issued on 21.03.10.
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.