Introduction
The New Insurance Law in the UAE (Federal Decree-Law No. 48/2023) introduces comprehensive regulations for the insurance sector, aiming to ensure effective governance, transparency, and compliance among insurance companies.
Scope Of the Law
The law applies to insurance companies and related professions, including holding companies meeting specific criteria. It doesn't extend to companies in Financial Free Zones, except where explicitly stated.
Applicable Entities and Criteria
Article 2 outlines applicable entities and criteria for holding companies involved in insurance activities.
The Notion of Insurance
Article 3 defines insurance as a contractual arrangement for financial compensation based on premium payments.
Types of Insurance Business
Article 4 classifies insurance into individuals and capitalization insurance, and property and liability insurance. The Central Bank defines specifics and can impose mandatory insurance for certain risks.
Central Bank's Competencies
Article 9 details the Board's extensive competencies in regulating the insurance business, covering aspects from solvency margins to customer protection and Emiratisation targets.
Entities Permitted for Insurance Business
Article 10 describes entities permitted to engage in insurance business, including local and foreign insurance companies.
Insurance Arrangements with Foreign Companies
Article 12 explains conditions for insurance arrangements with companies outside the UAE.
Effective Governance Standards
Chapter 5 establishes governance frameworks, outlining rules for board activities, key personnel appointments, and conflict of interest management.
Obligations for UAE Insurance Companies
Chapter 6 details various obligations, including prompt compensation payments, mandatory vehicle insurance, and transparency requirements.
Regulations and Penalties
Chapter 7 outlines measures, penalties, and grievance procedures for non-compliance, including fines and potential company restructuring or liquidation.
Funds and Financial Obligations
Chapter 8 mandates insurance companies to deposit a specified cash amount as a guarantee for their obligations.
Licensing Requirements
Chapter 9 outlines licensing requirements and procedures for insurance companies, including regulations for foreign companies.
Individuals and Capitalization Insurance Companies
Chapter 12 focuses on rules for individuals and capitalization insurance companies, emphasizing fair treatment of policies and financial position examinations.
Transfer of Insurance Policies and Suspension of Operations
Chapter 13 details procedures for transferring insurance policies between companies and suspending operations.
Takaful Insurance Companies
Chapter 14 introduces rules for Takaful Insurance Companies, ensuring adherence to Islamic Sharia principles.
Ownership and Mergers
Articles 74-76 cover regulations on ownership, controlling interests, and mergers in the insurance sector.
Financial Restructuring and Liquidation
Chapter 16 addresses procedures for restructuring and liquidating financially distressed insurance companies.
Emirates Insurance Federation
Chapter 17 establishes the Emirates Insurance Federation, mandating membership for all insurance-related companies and professionals.
Conclusion
The law establishes a comprehensive framework for the UAE insurance sector, enhancing transparency, compliance, and governance in the industry.
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.
