Special Reports

Tentative Steps From The UAE Regulator

The site presently contains documentation relating to the method of licensing of new insurance companies, intermediaries etc, along with a set of forms to be submitted in each case. Lists of insurance companies and brokers are also contained on the site. However, what is possibly most informative, are the lists of “professional”, “technical” and “financial” regulations that are listed on the site as being under consideration by the authority. Professional and technical regulations apparently under consideration including:

1. Executive regulations for the insurance law (6 of 2007)
2. Regarding registration of brokers and reinsurance
3. Regarding insurance intermediaries
4. Regarding the registration loss adjusters
5. Regarding the registration of actuaries
6. Regarding the registration of insurance consultants
7. Regarding the regulation of representative offices in the UAE
8. Regarding the licensing of TPA’s for medical insurers
9. Regarding re-insurance “bench marks”
10. Rules and codes of conduct for insurance companies

The draft financial regulations under consideration, among other things, deal with:
1. The share capital of insurance companies
2. The calculation of technical reserves
3. Solvency margins
4. Regulations regarding the principles of investment of policyholder’s rights
5. Anti-money laundering and anti-terrorism regulations
6. Insurance company records
7. Accounting requirements for insurance companies

We understand from the Insurance Authority that the regulations referred to are all in the process of being drafted and that the authorities’ board may propose some of these to be released for public consultation.

The Insurance Authority’s fees
It is understood that initially a key obstacle to the setting up of the Insurance Authority was a lack of funding. Pursuant to the new Insurance Law the Authority was entitled to raise money from licensing fees, however, it is only now following the issuance of Cabinet Decision 23 of 2009 that there is greater clarity with regard to the raising of such licensing fees by the authority.

Cabinet Decision 23 of 2009 provides for an annual fee payable by insurance companies calculated on the basis of a percentage of the annual premium written, less local re-insurance premiums (ie reinsurance premiums received from UAE cedants). The applicable percentage payable in respect of the various types of insurance being as follows:

• Life insurance and funds accumulation – 0.2 per cent
• Health insurance – 0.4 per cent
• Property and liability insurance – 0.5 per cent

We understand that insurance companies will have to submit details of their premiums for the period June 29, 2009, to December 31, 2009, by January 15, 2010, to allow the authority to calculate the fee payable for the first period.

In addition to these increased annual fees in relation to insurance companies, the new law provides a number of further fixed fees for insurance companies, agents, brokers, loss adjusters, actuaries, representative offices and re-insurance brokers. The applicable fee in a number of instances being an increase to what it was previously.

Protecting insurer interests
It is apparent that these new developments are going to be a regular happening over the next few months. Industry participants will therefore be well advised to keep an eye on developments and give comments in circumstances where the authority releases draft regulations for comment. In this regard we understand the authority has recently forwarded a draft Code of Conduct for insurers to the Emirates Insurance Association for its members’ inputs.

Providing comments on this may be a start to a system of greater involvement of insurance industry participants in regulatory issues.

Pages: 1 2