Cabinet Decision No. 42/2009

On the Minimum Limit of Capital of Insurance Companies

Amended by virtue of

Cabinet Decision No. 16/2017 dated 14/05/2017

The Cabinet,

Pursuant to the perusal of the Constitution;

Federal Law No. 1/1972 on the Competencies of the Ministries and Powers of the Ministers and its amendments;

Federal Law No. 8/1984 on the Commercial Companies and its amendments;

Federal Law No. 5/1985 on the Promulgation of the Civil Transactions Law of the UAE State and its amendments;

Federal Law No. 18/1993 on the Promulgation of the Commercial Transactions Law;

Federal Law No. 6/2007 on the Establishment of the Insurance Authority and Regulation of its Operations;

Ministerial Decision No. 227/10M/2009 on the Capital of Insurance Companies, and

Based upon the proposal of the Minister of Economy and Chairman of the Insurance Authority and the approval of the Cabinet,

Has issued the following Decision:

Definitions

Article 1

In application of the provisions of the present Decision, the following terms and expressions shall have the meanings assigned thereto unless the context requires otherwise:

State: United Arab Emirates.

Law: Federal Law No. 6/2007 on the Establishment of the Insurance Authority and Regulation of its Operations.

Companies Law: Federal Law No. 8/1984 on the Commercial Companies and the Laws amending or replacing it.

Authority: Insurance Authority.

Board: Board of Directors of the Authority.

Company: Every insurance company incorporated in the State and every foreign insurance company licensed to operate in the State, either through a branch or an insurance agent, including companies that conduct cooperative and takaful insurance transactions and reinsurance companies.

Scope of Application of the Decision

Article 2

The provisions of the present Decision shall apply to all companies with the exception of those operating in the free zones in the State.

Minimum Capital of the Company

Article 3

The minimum limit of the subscribed and paid up capital of the Company shall amount to AED 100,000,000 at least provided that the minimum limit of the subscribed and paid up capital of the reinsurance Company amounts to AED 250,000,000 at least.

Article 4

Article 4 was replaced by virtue of Article 1 of Cabinet Decision No. 16/2017 dated 14/05/2017, to read as follows:

a- At least (51%) of the capital of the Company incorporated in the State should be owned by natural persons who are nationals of the State or nationals of the Gulf Cooperation Council States or by legal persons being fully-owned by nationals of the State or nationals of the Gulf Cooperation Council States.

b- The Board shall issue a decision determining the regulations and regulations required for the entry of natural or legal persons as shareholders of the Company.

Increase of the Company’s Capital

Article 5

Subject to the provisions of the Companies Law, the capital of a Company may be increased under a decision issued by the Authority, upon an application submitted by the Company according to the form prepared by the Authority for such purpose.

Decrease of the Company’s Capital

Article 6

Subject to the provisions of the Companies Law and Article 3 hereof, the capital of a Company may be decreased upon an application submitted by the Company according to the form prepared by the Authority for such purpose, provided that such application includes a statement of reasons for which the company is applying for the decrease of the capital. Moreover, such decrease of capital of the Company shall not be intended to prejudice its current or future liabilities. The Board may either accept or reject such decrease according to the requirements of public interest.

Final Provisions

Article 7

All companies existing at the time of enforcement of the provisions of the present Decision shall adjust their conditions in accordance with the provisions hereof within three years from its effective date.

Article 8

The Board shall issue the instructions and regulations required for the application of the provisions of the present Decision.

Article 9

The present Decision shall be published in the Official Gazette and come into force from the date of its issuance.

Issued by us

On 10 Muharram 1431 H

Corresponding to 27/12/2009

Mohammed Bin Rashid Al Maktoum

Prime Minister

The present Decision was published in the Official Gazette Issue No. 504 p. 13