An Insurance Broker is defined under Federal Law Number 6 of 2007 (in respect of the establishment of the Insurance Authority and Regulating the Insurance Practice) as:

“The person mediating independently in insurance or reinsurance operations between the insurance/reinsurance applicant on one hand and the insurance/reinsurance company on the other, and charging, for his services, a commission from the insurance/reinsurance company with which the insurance/reinsurance policy is concluded.”

The Insurance Broker profession in the United Arab Emirates (UAE) is regulated by the Insurance Authority Board of Directors Resolution Number 15 of 2013 (the “Regulations”), including amendments from time to time. Under Federal Law Number 6 of 2007, the Insurance Authority (IA) was set up as a separate legal personality for the regulation and supervision of the insurance sector in the UAE.

To carry out the profession of an insurance brokerage, it is mandatory to obtain a License to practice the insurance activities in the UAE as a Company or a Branch or an Insurance Agent of Foreign Company. The Insurance Authority (IA) issues the License which is valid for one year from the date of issuance and renewable on a yearly basis. The License expires at the end of December each year.

The companies wishing to obtain a license from the IA must meet specific requirements set by the Regulations.

What are the criteria for the Licensing of Insurance Brokerage?

The companies must satisfy the following criteria:

  1. The company must be incorporated in the UAE and registered under the Commercial Companies Law having paid-up capital of AED three million or more, and the objective must be to practice the activity of insurance Brokerage.
  2. Branch of a Foreign Company or of a financial Free Zone must be registered under the UAE commercial law having paid-up capital of AED ten million or more.
  3. The company must submit an unconditional Letter of Guarantee produced by a bank payable on demand to the IA chairman of the board of directors. This may be liquidated partially or fully in order to guarantee the settlement of the broker's transactions and obligations arising from his practice towards his customers and the insurance companies.
  4. It is mandatory for the insurance broker to obtain an insurance policy covering the broker's professional liability in favor of the IA chairman of the board of directors. The value of this policy must be minimum AED two million for companies incorporated in UAE and minimum AED three million for a branch of a Foreign Company or in a financial Free Zone in the UAE.
  5. The insurance broker is continuously required to appoint the technical and administrative staff required for practicing the activity.
  6. Provision of a suitable headquarters, technical systems and software required to practice the activity.
  7. An internal control system for ensuring proper application of the regulations, laws, circulars and resolutions issued by the IA from time to time.
  8. The agreement between the license applicant and a bank operating in the UAE concerning the account designated to the practice of Insurance Brokerage must be submitted.
  9. The prescribed fees must be fully paid, and the company must comply with any additional requirements or conditions determined by the IA.

Once the application for approval to practice the Insurance Brokerage business is submitted to the IA in the prescribed Form along with the required documents, the IA issues the decision of approving or rejecting the application for a license within a maximum period of twenty working days. The Insurance Broker will be registered in the IA's Insurance Brokers Register on approval of the application. A decision rejecting an application for license, registration, cancelation or write-off may be appealed within twenty working days from being notified of the relevant decision. The appeal shall be submitted to the IA Board of Directors to decide thereon within twenty working days from the date of submission of the complete appeal. The Board's decision on the grievance shall be final.

Technical and Administrative Staff

Certain requirements, as set by the Regulations, must be met by the technical staff of the insurance broker. The Insurance Broker must appoint at least one Internal Auditor, General Manager, Operation Manager and at least one specialized employee for each type of insurance having the required qualification and experience. Resolution Number 58 of 2015 in respect of the execution of the Regulations (“Execution Regulations”) further lays down specific requirements for the employees and the person responsible for the branch.

Who can be appointed as technical and administrative staff for the insurance brokerage company?

Any individual who meets the following criteria:

  1. A natural person enjoying full capacity.
  2. The individual needs to be of good conduct, one who has never been sentenced for freedom restricting punishment in a moral turpitude crime without being rehabilitated.
  3. Has not stopped the payment of his commercial debts even if not associated with bankruptcy declaration, or has been judged bankrupt without being rehabilitated.

The Insurance Broker is required to notify the IA of any appointment, transfer or modification or termination, within a period of sixty days.

Obligations of the Insurance Broker

  1. The insurance broker must make written internal bylaws and provide a copy thereof to IA within three months from the date of obtaining the license.
  2. The insurance broker must continuously review and update the internal control system for ensuring proper application of the regulations, laws, circulars and resolutions issued by the IA from time to time.
  3. The insurance broker must create an Operational Guide for risk management and periodically update and review the same as per the applicable rules.
  4. Develop a professional code of conduct for employees; and supervise and organize their undertakings to ensure compliance with the Regulations and Execution Regulations.
  5. Co-operate and coordinate with the internal controller, to enable them to perform the assigned tasks and notify the IA in case of any violation.
  6. The insurance broker may not dismiss the internal controller except by the board of directors' decision or management board of the Insurance Broker's decision, provided that the IA and the internal controller are notified of the dismissal decision at least thirty working days prior to such dismissal, explaining the causes and justifications of the dismissal.
  7. The insurance broker must comply with the obligations towards the IA, customers and insurance companies as provided in the Regulations.


Penalties sanctioned by the IA in case the Insurance Broker violates the law, regulations, instructions, resolutions or circulars issued thereunder:

  1. A warning to the Insurance Broker and compel them to remove the breach causes and take the necessary actions to prevent recurrence it in the future; or
  2. Suspension of the Insurance Broker from practicing the activity for a maximum period of one year.

The IA may cancel the Insurance Broker's license in any of the following cases:

  1. Losing any of the license conditions as stipulated in the Regulations.
  2. Gross breach of any of the obligations and duties.
  3. Failure in renewing the license, or in paying the annual renewal fees or prescribed delay fines.
  4. Issuance of a final court judgment declaring the Insurance Broker bankrupt.
  5. The liquidation and dissolution of the Insurance Broker.
  6. When the Insurance Broker fails to practice the licensed activity within six months from the date of obtaining the license.
  7. When the Insurance Broker fails to practice the activity after a suspension period.
  8. When it is found that the license was granted on the basis of invalid information or data, or based on an undertaking that has not been implemented as determined by the IA.

Penalties sanctioned by the IA in case the employees of the insurance broker violate the law, regulations, instructions, resolutions or circulars issued thereunder:

  1. Warning; or
  2. Suspension from practicing the activity for a maximum period of two months; or
  3. Cancellation of the accreditation in case of excessive breach of the law, regulations, instructions, resolutions or circulars issued by the IA.

Originally published by STA Law Firm, July 2020

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.