The revenue of insurance brokers in the UAE is expected to be dented by a new commission payment structure which took effect from 15 October.
The brokers are thus asking the insurance regulator to review the new payment regime, reported Gulf News. This is despite the fact that the government had conducted a public consultation before the changes were effected.
Under the new regulations, fees/commissions generated from selling a life or savings policy will be paid to the broker over the premium payment tenor instead of in a one-off payment made at the time of the policy coming into effect and the first premium is paid by the policyholder.
Along with other changes, there is also a provision for a 'free-look' period of 30 days, where the insurer is required to offer a full refund if the buyer wishes to cancel the policy. Policy sellers must also provide extensive product illustrations for new policyholders at the time of purchase.
The new rules aim to prevent mis-selling and to improve transparency in selling policies, especially those related to life and term savings plans.