End in sight for UAE Insurance Authority licence ban

Recently published legislation from the UAE Insurance Authority suggests the regulator is about to lift its ban on approving new licence applications from insurance brokers.

The Insurance Authority imposed a moratorium on approving licence applications in 2008 during the height of the global financial crisis, and at a point when Dubai was suffering particularly badly.
However, a translation of the newly published rules seen by International Adviser provides a series of chapters which discuss the application process, suggesting the Insurance Authority may be about to lift its ban.
Specifically, the Authority gives nine points in “Article 7” of the new rules describing the process for applying for a licence for insurance brokers. While there has been no confirmation from the Insurance Authority it is about to lift its ban on providing new licences, the inclusion of this Article with the new rules, suggests this may be about to change.
The new rules are set to come into force at the end of November and, as revealed last month, will put increased financial pressure on insurance brokerages in the UAE, particularly smaller offices.
Among the many changes being made by the regulation is a significant increase in the paid up capital required by firms, jumping from AED1m to AED3m for locally incorporated firms and to AED10m for foreign companies.
Another point clarified by the new rules is that an insurance broker can only work for one licensed intermediary. This has always been the case, but has been abused by some brokers in the UAE.
Last month, International Adviser reported that Zurich had placed its terms of business with broker firm Continental under review. While neither company would confirm any details, there has been industry speculation the review was over concerns Continental was one company which allowed other brokerages to trade under its licence.

Two-thirds of UAE residents do not have a life insurance policy

Families can suffer from severe economic loss if their primary salary earner dies. A life insurance policy provides a cash lump sum or regular income to replace the earnings that would cease at the death of the insured to pay regular bills, school and university fees, the mortgage and outstanding debts.Additionally, the survey found that among residents with life insurance, two-thirds (66 per cent) have cover that only equates to two or less years of their annual salary, which would be insufficient to cover the loss of income from the primary salary earner.What is most concerning about this survey is the finding that 60 per cent of people with children do not have life insurance,” commented Andrew Oliver, Head of Propositions and life insurance expert at Zurich International Life Limited.Life insurance should be a fundamental part of your financial plan as it provides a monetary lifeline that protects your family from financial distress following the death of the main breadwinner.”Zurich’s survey also found that only 20 per cent of UAE residents have critical illness insurance, also referred to as disability cover.Critical illness insurance pays out a lump sum or a regular income if you are diagnosed with a serious medical condition or become permanently disabled as a result of injury or illness. The insurance helps cover the cost of medical treatment and replace lost earnings.Oliver added: “Life is unpredictable, so it is important to be prepared. Life insurance and critical illness cover provide solutions to help protect you and your family from the unexpected. But it is important to seek financial advice to ensure you select the right policy with adequate cover to meet your family’s needs.”