News Middle East18 Oct 2020

UAE:Insurance brokers seek review of new regulations on commission payments

18 Oct 2020

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.

Changes

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.

 

 

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Recent Comments

Chandra Shekhar Das

Good initiative. As a result, turnover of agent will be reduced,persistency will be increased,rate of policy lapse will be reduced. Again thanks for such kind of decision.

18 October 2020

Jamal Mohamed

It is good a good move. However, if they regularize the other classes of business, then the insurers can avoid unhealthy competitions among them especially on commission/brokerage.

19 October 2020