New UAE Insurance Regulation for 2024: Stricter Measures to Enhance Consumer Protection

As the insurance landscape evolves, so does the regulatory framework designed to ensure transparency, fairness and consumer protection.

The Insurance Broker Regulations 2024 (New Regulations) introduce significant changes that will impact brokers, insurers and consumers alike.

The Central Bank of the United Arab Emirates (CBUAE), as the insurance regulator, has issued the New Regulations, which abrogate the Resolution No. 15 of 2013 concerning the insurance brokerage regulations. 

The Insurance Authority Director General Decision No. 58 of 2013 concerning the implementation of the aforementioned Resolution No. 15 of 2013, and the Insurance Authority Work Guide of the Internal Controller at Insurance Brokerage Companies.

Key Changes in the New Regulations

Enhanced Disclosure Requirements: One of the most notable changes is the heightened emphasis on transparency. Insurance brokers are now required to provide more detailed disclosures about their remuneration and any potential conflicts of interest.

This includes clear information on how they are compensated by insurers and any incentives that may influence their recommendations.

Strengthened Consumer Protection Measures: The New Regulations introduce more stringent measures to safeguard consumers.

Brokers must now ensure that all advice given is in the best interest of the consumer, taking into account their specific needs and financial situation.

This includes a comprehensive assessment of the consumer’s insurance requirements and a thorough explanation of all policy terms and conditions.

Mandatory Professional Development: To maintain high standards in the industry, the New Regulations mandate ongoing professional development for brokers.

This includes regular training and certification updates to ensure that brokers remain knowledgeable about industry changes, emerging risks and new products.

Improved Complaint Handling Procedures: The regulations stipulate that brokers must have robust complaint handling procedures in place.

This includes a clear process for consumers to raise concerns and for brokers to address and resolve complaints efficiently. Brokers are also required to keep detailed records of complaints and their resolutions, which will be subject to regulatory review.

Increased Regulatory Oversight:  Regulatory bodies will now have greater powers to oversee and enforce compliance with the New Regulations. This includes more frequent audits and reviews of broker practices.

Brokers should be prepared for increased scrutiny and ensure that their operations and practices are fully compliant with the updated standards.

Bank Guarantee: Brokers established in the free zones are now required to furnish a bank guarantee of up to Dh5 million in addition to maintaining the minimum capital requirements.

What Consumers Should Know

For consumers, the New Regulations mean increased protection and transparency. When working with insurance brokers, consumers can expect clearer information about the products and services being offered, as well as more detailed explanations of any associated costs.

Conclusion

The New Regulations mark a significant shift towards greater transparency and consumer protection in the insurance industry. While these changes will require adjustments from brokers, they ultimately aim to enhance the overall consumer experience and ensure fair practices within the industry.

Staying informed and prepared will be key for brokers to navigate these new requirements successfully and continue to deliver value to their clients.

(The writer is an insurance expert at Dubai-based NYK Law Firm)

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