UAE: Shake-up expected in insurance consultancy segment over new rules
Source: Middle East Insurance Review | Jul 2018
A new regulation issued by the UAE Insurance Authority (IA) is expected to result in a significant decrease in the number of insurance consultants in the country, said a law firm.
Dubai-based BSA Ahmad Bin Hezeem & Associates said the 20 May decision introduces strict new requirements to increase the quality of insurance consultancy services provided in the UAE.
All registered consultants have six months to submit the necessary documentation to maintain their registration with the Authority. Failure to do so will result in the cancellation of their licence and the inability to provide insurance consultancy services legally, reported Gulf Business.
Among the new requirements are that consultants are barred from combining their profession with any other one associated with insurance, such as a broker.
They must also meet educational and practical experience requirements and pass a test prior to registration.
Foreign companies wishing to practise insurance in the UAE will need to be licensed as consultants in their home country, and all companies and individuals must meet new professional indemnity and insurance policy requirements. These are a professional indemnity and insurance policy submitted to the authority with the sum insured of AED3m and a maximum deductible of AED30,000 ($8,167) for corporate insurance consultants. Employees of the consultant are not subject to this requirement.
For individual consultants, the professional indemnity and insurance policy submitted to the IA must have an insured sum of AED5m and maximum deductible of AED30,000.
“This decision will undoubtedly result in a significant decrease in the number of insurance consultants currently registered at the IA as many won’t be able to satisfy the new prerequisites,” BSA Ahmad Bin Hezeem & Associates said. M
AED1 = $0.27