Published on May 20th, 2018, Decision No. (12) of 2018 issued by the United Arab Emirates (“UAE”) Insurance Authority regulates the licensing and registration of insurance consultants and organizes their operations.
The strict requirements introduced will allow the UAE Insurance Authority to ensure a high quality of insurance consultancy services provided to clients throughout the UAE.
All consultants currently registered are granted a period of six months to rectify their situation and submit all documents required by the Insurance Authority to maintain their registration. Failure to do so will result in cancellation of their registration and would prevent them from legally providing insurance consultancy services to their clients until they are fully compliant with the Decision No. (12) of 2018.
The new law implements strict requirements which aim to better organize the practice of insurance consultancy in the UAE:
– It prohibits all insurance consultants from combining their profession (as insurance consultants), with any other profession associated with insurance. For example, an insurance consultant may not also act as an insurance broker.
– Educational requirements and practical experience requirements have been specified for individual insurance consultants and an assessment to pass prior to registration has been introduced.
– Stricter conditions issued for foreign companies wishing to practice insurance consultancy in the UAE as these companies will need to be licensed as insurance consultants in their country of origin.
– Decision No (12) of 2018 has also introduced a professional indemnity and an insurance policy as follows:
– Corporate insurance consultants will need to submit to the Insurance Authority a professional indemnity and an insurance policy with a sum insured of 3 million dirhams, with a maximum deductible amount of thirty thousand dirhams (AED 30,000). Employees of corporate insurance consultants are not subject to this requirement.
– Individual insurance consultants will need to submit to the Insurance Authority a professional indemnity and an insurance policy with a sum insured of 5 million dirhams, with a maximum deductible amount of thirty thousand dirhams (AED 30,000).
– Penalties for infringement have been introduced. Any violation of the Decision No. 12 will put insurance consultants at risk for penalties, including but not limited to license suspension and/or cancellation.
– This decision will undoubtedly result in a significant decrease in the number of insurance consultants currently registered at the Insurance Authority as many won’t be able to satisfy the new prerequisites.