UAE: Central Bank commences operational procedures to execute IA merger
Source: Middle East Insurance Review | Mar 2021
The Central Bank of the UAE (CBUAE) said it has started operational procedures to assume supervisory and regulatory responsibilities over the insurance industry.
The central bank has recently formed several committees and working groups to complete the merger process. The moves are pursuant to the decretal Federal Law No 25 of 2020 whereby decreeing the merger of the Insurance Authority (IA) into the central bank.
The decretal federal law issued earlier in this regard stipulates that CBUAE shall assume the regulatory, supervisory, licensing and enforcement functions of the insurance sector. The CBUAE will provide an appropriate environment to develop and enhance the dynamic role of the insurance industry to ensure financial stability, encourage competition, and support Emiratisation. As per provisions of the decretal federal law, the CBUAE is obliged to monitor the financial solvency of insurance companies, ensure ethical conduct of firms, and protect the rights of the insured.
Following the completion of the merger process, the CBUAE in cooperation with relevant international authorities, will ensure implementation of best practices and standards in executing its mandate to supervise and regulate the insurance sector.
The central bank will continue to facilitate the advancement of new technologies across all elements of the UAE’s financial sector as part of its FinTech strategy, including the adoption of InsurTech for insurance services. These initiatives will make the sector more competitive, innovative and facilitate financial inclusion.
The CBUAE also confirms that the rules, decisions, circulars, and regulations issued by the IA shall continue to apply to all licensed institutions and activities until replaced by regulations issued by the central bank. M