Without a license from the Insurance Authority, a company cannot perform insurance brokerage in the UAE. A license is valid for one year and can be renewed every year. Each year, it expires at the end of December. Companies who want to get a license from the Insurance Authority must meet the Regulations' conditions. The applicant must be a company incorporated in the UAE under the Commercial Companies Law, or a branch of a company incorporated in a foreign country or a financial freezone in the UAE, as long as it is authorized to conduct the same types of insurance brokerage.
It should also be governed by the same degree of regulatory authority and have been in use for at least five years. The Insurance Authority has the authority, under the regulations, to impose additional conditions in addition to those set forth in the regulations.
The insurance broker's technical team must also meet certain qualifications established by the Regulations. For each form of insurance, the insurance broker must have at least a general manager, operations manager, Internal Auditor, and at least one specialized employee.
The Execution Rules also include particular requirements for each of the aforementioned personnel as well as the person in charge of the branch.
The insurance broker must provide the Insurance Authority chairman of the board of directors with an unequivocal Bank guarantee payable on demand. This may be liquidated in whole or in part at any time to ensure the settlement of the broker's transactions and obligations stemming from his work with insurance companies and consumers.
The insurance broker must get a professional liability insurance coverage in the name of the Insurance Authority chairman of the board of directors. For enterprises incorporated in the UAE, the insurance must be worth at least AED 2 million, and for a branch of a company incorporated in a foreign nation or in a financial free zone in the UAE, the policy must be worth at least AED 3 million.
The Regulations impose specific requirements on insurance brokers in their dealings with the Insurance Authority, insurance firms, and their clients.
Except for life insurance and funds accumulation operations, group health insurance, marine and air transport insurance, vessels hull and petroleum insurances, the insurance broker should follow up and collect premiums on behalf of the insurance companies.
Under Federal Law Number 6 of 2007 (Establishment of the Insurance Authority and Regulation of the Insurance Practice), an insurance broker is defined as follows:
?A person who acts as an independent intermediary in insurance or reinsurance transactions between the insurance/reinsurance applicant and the insurance/reinsurance company, charging a commission from the insurance/reinsurance company with which the insurance/reinsurance policy is concluded.?
The Insurance Authority Board of Directors Resolution Number 15 of 2013 (the "Regulations") regulates the insurance broker profession in the United Arab Emirates (UAE), including revisions from time to time. The Insurance Authority (IA) was established as a separate legal personality under Federal Law Number 6 of 2007 for the regulation and supervision of the UAE's insurance sector.
It is necessary to obtain a License to Practice Insurance Activities in the UAE as a Company, a Branch, or an Insurance Agent of a Foreign Company before engaging in the profession of insurance broking.
The License is issued by the Insurance Authority (IA) and is valid for one year from the date of issuance and is renewed on a yearly basis. Each year, the License expires at the end of December.
Companies that want to get a licence from the IA must meet the Regulations' specific conditions.
The following conditions must be met by the businesses:
The IA provides a decision on whether to approve or deny the application for a licence within a maximum of twenty working days after the application for approval to practise the Insurance Brokerage business is submitted to the IA in the specified Form together with the requisite documents. When the application is approved, the Insurance Broker will be added to the IA's Insurance Brokers Register. A licence, registration, cancellation, or write-off application may be appealed after twenty working days of being notified of the relevant decision.
The appeal must be filed to the IA Board of Directors within twenty working days of the date of receipt of the complete appeal for a decision. The decision of the Board on the grievance is final.
Personnel in the technical and administrative fields
Certain conditions established by the Regulations must be met by the insurance broker's technical team. For each form of insurance, the Insurance Broker must designate at least one Internal Auditor, General Manager, Operations Manager, and at least one specialist employee with the necessary qualifications and expertise.
Resolution No. 58 of 2015, relating to the implementation of the Regulations (the "Execution Regulations"), establishes additional obligations for employees and the person in charge of the branch.
Who can be appointed to the insurance brokerage firm's technical and administrative staff?
Any person who meets the following requirements:
Any appointment, transfer, modification, or termination by the Insurance Broker must be reported to the IA within sixty days.
In the event that an Insurance Broker violates the legislation, regulations, instructions, resolutions, or circulars issued thereunder, the IA may impose the following penalties:
In any of the following situations, the IA may revoke the Insurance Broker's licence:
Penalties imposed by the IA if an insurance broker's workers break the law, regulations, instructions, resolutions, or circulars published under it:
the IA may give a warning, suspend the activity for up to two months, or cancel the accreditation.
The Dubai Courts' decisions in this case are unexpected. It's possible that the court used general contract standards and didn't consider the nature of the brokers' reinsurance operation, where cover is provided through a cover note. Because this is the first instance of its kind in the UAE, its conclusions cannot be regarded to be particularly authoritative. Several such cases must be heard in UAE courts in order to establish a rule on the accountability of insurance brokers for reinsurance claims if reinsurance cover is obtained by issuing two separate cover notes. Future decisions, it is hoped, would deviate from the findings in this case and uphold the industry. To know more connect with Dhanguard!!
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