UAE Legal Update: Regulatory Alert (Healthcare)

Federal Law No.2 of 2019 – Using IT and Telecommunications in the Healthcare Sector

The United Arab Emirates Government Promulgate Federal Law No.2 of 2019 – Using IT and Telecommunications in the Healthcare Sector (“the Law”), which for the first time regulates healthcare data processed, controlled, transferred and stored electronically.

The Law contains 22 Articles, which includes, but is not limited to the creation of a central data base system, obligations in respect of data privacy and use of IT and telecommunication technology when processing, transferring and storing data. In addition, obligations are placed on media licensing, training and violations for breach of the Law.

The Law is unique insofar that it is the first federal privacy law relating to healthcare data and protection of personal and sensitive data in the UAE.

Healthcare providers, insurers, insurance intermediaries, third party medical claims administrators, technology companies in the healthcare space and others dealing with healthcare will need review an audit their current practices and comply with the Law.

The Law is expected to be gazetted in the coming weeks and will be implemented three months from that date.

BSA will provide a follow up detailed analysis of the law in due course.

About BSA Ahmad Bin Hezeem & Associates LLP

BSA is a law firm originally founded in Dubai with the primary mission of delivering top-tier legal services based on our comprehensive knowledge of local, national, and international law.

Since our inception in 2001, we have rapidly expanded to a leading full-service law firm, with offices throughout the Middle East and France. Our lawyers are internationally educated, bi-lingual in languages such as English, Arabic, and French, and dual-qualified in both regional and international jurisdictions, having rights of audience in every country within which we operate.

BSA is a law firm that truly reflects the energy and ambition of the Middle East.


Legal challenges for a growing defence market

The IDEX conference just concluded last week in Abu Dhabi demonstrated the intertwining nature of the threats that the world currently faces in dealing with malevolent actors, as well as the resilient manner in which government and industry have developed countermeasures to deal with this ever-increasing threat spectrum.

The UAE is at the forefront of adopting 4IR technology for the public benefit. Given this adoption, the UAE government has enacted a legal framework to regulate the use of cyber-technology and related forward-looking innovations. However, as is the case with almost all emerging technologies, legislation and regulatory guidance often plays catch up with the technology, and there are gaps that need to be cured as the technology advances.

There are numerous UAE laws and regulations covering various aspects of 4IR technology, including Federal Law No. 5 of 2012 covering cyber-crimes, and the newly enacted Federal Law No. 25 of 2018 dealing with futuristic projects, which seeks to regulate development of AI. However, the latter has yet to be fully implemented through its enabling regulation, leading to some marketplace uncertainty.

Likewise, the various free zone authorities, particularly the DIFC and ADGM, have separate regulatory schemes covering such technology. Thus, stakeholders need to be aware of the legal landscape in which this technology is currently being developed and deployed.

This terrain creates opportunities for both large corporations and SMEs alike to develop and deploy innovative solutions to defend against malevolent actors, including threats posed by terrorism and cyber-criminals, as well as the inevitable byproduct of non-malicious technological failures inherent in all emerging technologies.

For more information about BSA Ahmad Bin Hezeem & Associates LLP, please visit


UAE Insurance Authority Issues list of Administrative Fines

The UAE Insurance Authority (‘IA’) has now promulgated and issued the ‘Cabinet Resolution No 7 of 2019 Concerning the Administrative Fines Imposed by the Insurance Authority’ (‘the Resolution’), which was issued by His Highness Mohammed Bin Rashid Al Makhtoum, the Prime Minister of UAE on 6 January 2019, followed by its publication on the IA’s website earlier this month.

The Resolution applies to all licensed United Arab Emirates (‘UAE’) insurance companies and insurance related professionals such as TPAs and Loss Adjustors, defined in the Resolution as ‘Company’ and ‘Insurance-Related Professionals’ respectively. The Resolution provides an extensive list of violations and administrative fines for breach of the listed violations.

The penalties are far reaching in that UAE insurance providers could be exposed to fines of up to AED two (2) million.  Any fine issued by the Board of the IA can be appealed within 15 days of the publication and the Board shall provide a decision on the appeal within 60 days of filing the appeal.

Historically, the fines and penalties under Federal Law No 6 of 2007 were mostly restricted to licensed entities and left scope for evasion of the penalties. The violations and fines listed in the Resolution are likely to be strictly enforced by the IA. By way of illustration, any entity carrying out re-insurance in UAE without the necessary license from the Authority can now be fined AED 250,000.  Similarly, Representative Offices of foreign insurance companies carrying out their business in UAE without prior approval from the Authority will attract a fine of AED 250,000.

In addition, insurance mediation with a non-licensed UAE insurance company is not permitted and attracts a fine of AED 100,000. Reinsurance and insurance mediation violations within the Resolution provides an interesting interpretation in the context of current UAE reinsurance and insurance mediation operations in the UAE, which might expose insurance providers and their insurance counterparties inadvertently to penalties.

The Resolution comes into force from 6 April 2019 and is significant in terms of the 204 listed violations and the financial costs to the stakeholders of the UAE insurance industry should they not correct their regulatory position within 5-6 weeks.

Many UAE insurance providers will need to audit their regulatory position including meeting the UAE solvency obligations under the UAE Financial Regulations as well as their operational and distribution requirements in order to avoid risk of violating the provisions of the Resolution.

Insurance providers should carefully review the provisions of the Resolution and the attached Schedule to correct any violations or potential violations to avoid costly and unnecessary penalties.  No upper limit has been prescribed for the fines, nor are there any provisions for compounding of the fine, perhaps suggesting that the fines will be multiplied by the number of times the violation occurred.

Getting The Deal Through – Distribution and Agency 2018

Global commerce depends, to a very great extent, on the relationships between manufacturers and suppliers on the one hand and their distributors and commercial agents around the world on the other. These relationships are the linchpin to moving goods and services to new markets around the world and they are governed, not only by the contracts negotiated between suppliers and their distribution partners, but by a wide range of laws and regulations, which vary widely from country to country. Developments in areas such as privacy and data protection and increasing concerns over cybersecurity affect distribution relationships as well, as a result of the normal sharing of customer information and other data between distribution partners.

This Distribution & Agency book covers the main points of law and regulation governing relationships between suppliers and manufacturers, and distributors and commercial agents, worldwide. Written by local experts in key jurisdictions, topics covered include: regulations governing direct distribution; potential restrictions, financial and tax considerations on foreign businesses’ operations; distribution structures available to suppliers; regulation of relationships between suppliers and distributors; restrictions on the distribution of competing products; relevant consumer protection laws; restrictions on contractual choice of law, courts or arbitration tribunals; and dispute resolution, mediation and arbitration procedures and processes.


New Insurance Authority regulation to impact insurance consultants

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.


The Impact of Dubai Fires: What Every Landlord & Tenant Needs to Know

The recent Zen Tower fire in Dubai Marina is the just the latest in a spate of high profile tower fires to sweep the city in recent years – Tamweel Tower in JLT in November 2012, the ironically named Torch Tower in Marina in February 2015 and once more in August 2017, Address Hotel on New Year’s Eve 2015, Sulafa Tower in July 2016, and Almas Tower in April 2018: to name but a few. Thankfully, as with the preceding fires, yesterday’s Zen Tower fire resulted in zero casualties – a testament to the skill and efficiency of the UAE Civil Defence. However, the severity of such fires and their impact on residents should not be underestimated.

What Causes Such Fires?

While the combustion of high-rise buildings in the UAE seems to be common, the cause does not. In the case of the 2012 fire in JLT’s Tamweel Tower, it is believed that a carelessly disposed of cigarette caused the tower to catch fire. The infamous New Year’s Eve fire at the Address hotel was caused by an electrical short circuit. The cause of the Zen Tower blaze has yet to be determined.

Although the cause of the fires differs, the rapid spread of the blaze in each instance can be credited to the use of flammable aluminum cladding on the exterior of each building. It is estimated that at least 70% of buildings in Dubai constructed before the year 2009 are cladded with this non-fire resistant material. Following an update to the 2011 Fire and Life Safety Code, all buildings over 15 meters tall are required to be fire resistant aluminum cladding. However, the issue here is that the code is not applied retrospectively and existing towers will only have to comply with the new cladding regulations when the buildings are due for maintenance.

What is the position of a building’s residents in the event of fire?

In the event of a tower fire, the responsibilities of the property owner and the property developer are generally not understood very well by tenant; tenants often expect to be covered by the insurance policy held by either the property owner or developer which is unfortunately not the case. Generally, the property developer and the owner’s association are responsible for the areas in the property over which they maintain control, such as public areas – this does not extend to the tenants actual living space nor their personal possessions. Therefore, to obtain adequate cover, a tenant needs to take out his own individual insurance policy. If a tenant fails to do so, in the event of a fire, storm or flood they will have to bear the costs for any incurred damages themselves.

The UAE Civil Transaction Law, issued by way of Federal Law No. 5 of 1985 (“Civil Code”) regulates fire insurance coverage and the duties and liabilities of the insurance provider. According to the law, the insurer shall cover all damages caused by the fire notwithstanding the reason of the fire, provided that the damages are a direct result of the fire and have not been caused by deliberate or fraudulent actions of the insured or the beneficiary. The scope of insurance and therefore the compensation will vary, depending on the policy and the insurance company.

In the event of a fire that renders a building uninhabitable, the tenant may seek to terminate their lease agreement. Usually, lease agreements are cancelled by mutual agreement between the landlord and tenant or by order of court. The first step towards cancellation is to establish whether the tenant’s situation falls within the scope of the provisions of the Civil Code. If so, the next step will be to address a letter to the landlord detailing the situation, the grounds for the cancellation and the date of the loss of enjoyment, and requesting the return of all postdated cheques and the refund of prepaid rent from the appropriate date as determined by the Civil Code as well as any deposit. If the landlord agrees to the cancellation, confirmation should be obtained in writing and preferably signed by both landlord and tenant.

If the landlord refuses to comply with a request for cancellation, the tenant has the option to file a complaint with the Dubai Rental Committee which shall include a request for the landlord to pay the costs incurred by the tenant and the costs of the proceedings.

How Will Such Fires Impact on Residents’ Insurance Premiums?

As residents become increasingly aware of the risk of fire in Dubai’s high rise towers, we can expect to witness an increased demand for insurance cover. Despite the introduction of the Fire Safety and Life Protection code, many buildings throughout the city remain cladded with flammable material and are equipped with inadequate fire safety measures – meaning that the fire in Zen Tower is unlikely to be the last of its kind. Therefore, the need for tenants to obtain insurance cover is imperative. Underwriters have already begun to take note of the increased risk and have adjusted their rates accordingly.


If a tenant does not have sufficient insurance cover, there is a high probability that he will be responsible for covering the costs for all damages. In addition, a situation may arise where a tenant has to pay for a new apartment, while still having a financial obligation to continuing to pay rent pending lease cancellation. It is always advisable to get advice from a lawyer in order to proceed with the situation efficiently and on legally safe ground.