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LIMRA examines changing regulations on distribution

Source: Middle East Insurance Review | May 2018

LIMRA, a worldwide research, learning and development organisation, headquartered in Spain, organised in Dubai a workshop, ‘Changing regulation on distribution within the Middle East’.
 
   Organised in collaboration with the Emirates Insurance Association (EIA), the workshop was held to share with local insurers, bankers and intermediaries global best practices and insights on changing regulations around the world.
 
   Mr Bernard Retali, president, LIMRA Europe, Middle East & Africa, said, “Life insurance in the Middle East is growing, and one factor that impacts this growth is regulation. Looking at the more mature and developed life insurance markets in other regions can provide guidance within a changing regulatory landscape.”
 
   Mr Fareed Lutfi, secretary general of EIA, said life business in the UAE is expected to grow 5% annually, driven by rising population, risk awareness, increasing income and wealth and a significant protection gap.
 
   “Despite high GDP levels, the penetration of life insurance in the UAE is low at about 0.7%, which is similar to several other countries in the Middle East. An increasing number of international life insurers are leveraging the low penetration of life business in the UAE.”
 
   The life industry in the UAE will undergo fundamental changes as a result of the upcoming regulations, restrictions on indemnity commission, caps on overall fees and commissions charged to customers as well as new adviser licensing process and approved list of authorised funds for retail investors. 
 
   The workshop cited European examples of changes in remuneration, advice and mis-selling of insurance and investment products.
 
   “As competition intensifies, the term rates reduce, but the commission didn’t go down and the insurance companies still make money. So we have to have a healthy competition so that consumers benefit,” said an insurance broker.
 
   Participating intermediaries raised the issue of indemnity commission and hoped that the regulator will review the system and suggest changes in the forthcoming regulations.
 
   LIMRA provides its members with the latest insight and analysis on retirement, insurance and distribution, helping them develop effective business strategies that positively impact the bottom line. M 
 
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