UAE: Insurance Authority releases details of reinsurance regulations
Source: Middle East Insurance Review | Jul 2019
Mr Sultan Bin Saeed Al Mansouri, Minister of Economy and chairman of the UAE Insurance Authority (IA), has issued a resolution on regulations for reinsurance business, including the licensing and registration of reinsurers.
The provisions of the regulations shall apply to: reinsurers established in the country; branches of foreign reinsurers; reinsurance business ceded by an insurer licensed and registered with the IA; accepted reinsurance business by a licensed insurer registered with the IA; and an insurance or reinsurance pool in which an insurer or reinsurer licensed and registered with the IA participate or an underwriting syndicate.
The regulations also apply to takaful and retakaful operators.
A foreign company specialised in reinsurance shall not be permitted to operate within the UAE through an agency, taking into consideration the special case of the underwriting syndicates and P&I clubs.
The subscribed and paid-up capital of the reinsurer shall not be less than AED250m ($68m). The capital of the parent company in its home country should not be less than AED250m.
The IA may determine a minimum capital for the company greater than AED250m if the reinsurer is to be involved within a short duration of its incorporation in reinsurance business at the regional and international level.
At least 51% of the capital of the reinsurer incorporated in the UAE shall be owned by natural persons who are UAE nationals or GCC nationals or by legal persons fully owned by UAE nationals or GCC nationals.
A foreign company wishing to open a branch in the UAE to conduct reinsurance business should have a classification not less than the minimum classification specified in the table below or the equivalent classification ratings of other international classification bodies recognised by the Authority:
The classification must be granted on the basis of complete internal information. A classification granted based only on published information shall not be accepted. The foreign company should not be incorporated in a state having a lower classification than that aforementioned. Among other matters, the 45 articles in the regulations cover participation in insurance or reinsurance pools and takaful/retakaful business.
The regulations shall be published in the Official Gazette and shall come into force as of the day following the publication. Insurers and reinsurers must reconcile their positions with the provisions set out in the regulations within 18 months from the date they come into effect. M
AED1 = $0.27