1-1

Applicant: A juridical Person, which files an application with the Central Bank for the granting of a License for the provision of Insurance Brokerage services.

1-2

Beneficiary: A Person who initially acquired the Insurance Policy rights, or to whom such rights have been legally transferred.

1-3

Central Bank: The Central Bank of the United Arab Emirates.

1-4

Central Bank Laws: Decretal Federal Law No. (14) of 2018 Regarding the Central Bank and Organization of Financial Institutions and Activities, as amended and Decretal Federal Law No. (48) of 2023 Concerning the Organization of Insurance Operations.

1-5

Cession: Ceding the liability arising from the Insurance Policy as a whole or in part by the Company or the Reinsurer to another Reinsurer pursuant to a reinsurance contract or Retrocession contract.

1-6

Claim Settlement: The process by which a Company pays money to a Client as compensation, which originates from an insurance/reinsurance contract.

1-7

Client: A Person for whom the Insurance Broker practices the Insurance Brokerage business in accordance with the provisions of this Regulation.

1-8

Company:

a. 

The insurance company incorporated in the State, and the foreign branch of an insurance company, that is licensed to underwrite primary insurance and reinsurance, including Takaful insurance companies, or

b. 

A reinsurer.

1-9

Conflict of Interest: A situation of actual or perceived conflict between the duty and private interests of a Person, which could improperly influence the performance of his/her duties and responsibilities.

1-10

Control Function: Function (whether in the form of a natural Person, unit or department) that has a responsibility in an Insurance Broker to provide objective assessment, reporting and/or assurance; this includes risk management, compliance, and internal audit.

1-11

Corporate Governance: A set of relationships between an Insurance Broker’s Representatives, Senior Management, Clients and other stakeholders; and a structure through which the objectives of the Insurance Broker are set, and the means of attaining those objectives and monitoring performance are determined.

1-12

Financial Free Zones: Financial free zones subject to the provisions of Federal Law No (8) of 2004, Regarding Financial Free Zones.

1-13

Fit and Proper Process: The evaluation of the proposed natural Persons to become the Insurance Broker’s Representatives, Senior Management, Specialised Employees and other natural Persons as determined by the Central Bank from time to time, in terms of integrity, competence and financial soundness. The specific fit and proper criteria are listed in Article (5) of this Regulation.

1-14

Governor: The Governor of the Central Bank.

1-15

Insurance-Related Professions: Any Person licensed by the Central Bank to practice any of the activities of insurance agent, Insurance Broker, surveyor and loss adjuster, insurance consultant, actuary or health insurance third party administrator or any other Insurance-Related Profession that the Central Bank decides to regulate.

1-16

Insurance Certificate: A temporary documentary proof of insurance coverage containing a summary of the terms, conditions and coverage.

1-17

Insurance Policy: The insurance/ reinsurance document concluded by the Company and Client, containing the terms and conditions of the contract between the parties, their obligations, and rights or the rights of Beneficiary of the insurance/reinsurance and any endorsements therein.

1-18

Insurance Broker: The juridical Person Licensed by the Central Bank which independently intermediates in insurance and reinsurance operations between the insurance or re-insurance Client on one side and any other Company from the other side, and receives for its efforts Remuneration from the Company with which the insurance or re-insurance has been concluded.

1-19

Insurance Broker’s Representatives: The partners or board of directors of the Insurance Broker, or their equivalent.

1-20

Insurance Brokerage: The activity of soliciting, negotiating or selling insurance/reinsurance contracts through any medium, where:

a. 

"Solicit" means attempting to sell insurance/reinsurance or asking a Person to apply for a particular kind of insurance/reinsurance from a particular Company for Remuneration by the Company exclusively;

b. 

"Negotiate" means the act of conferring directly with, or offering advice directly to, a Client or prospective Client of a particular contract of insurance/reinsurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the Person engaged in that act either sells insurance/reinsurance or obtains insurance/reinsurance from Companies for Clients; and

c. 

"Sell" means to exchange a contract of insurance/reinsurance by any means, for remuneration on behalf of a Company

1-21

Internal Controls: A set of processes, polices and activities governing an Insurance Broker’s organizational and operational structure, including reporting and Control Functions.

1-22

License: A License issued by the Central Bank to an Applicant to provide Insurance Brokerage services and to register it in the Register.

1-23

Matter of Significance: A matter, or group of matters, that would have a significant impact on the activities or financial position of the Insurance Broker. Examples include failure of preserving the assets of the Insurance Broker, failure to comply with Central Bank Laws and Regulations, and other matters that are likely to be of significance to the function of the Central Bank as regulator.

1-24

Outsourcing: An arrangement between an Insurance Broker and a service provider within the State, for the latter to perform a process, service or activity which would otherwise be performed by the Insurance Broker itself.

1-25

Person: Any natural or juridical person.

1-26

Personal Data: Any information which are related to an identified or identifiable natural Person, pursuant to Central Bank Notice CBUAE/BSD/N/1661 dated 18 April 2022 Guidance on the Personal Data that Can be Collected for Insurance Policies.

1-27

Premium: An amount of money that the Client approved to pay in return of providing him/her/them with the insurance/reinsurance coverage.

1-28

Reinsurer: A Company or a reinsurance company or an insurance pool or reinsurance pool, or syndicates of underwriting insurance groups that accept cessions.

1-29

Remuneration: Any commission, fee, charge or other payment, including an economic benefit of any kind or any other financial or non-financial advantage or incentive offered or given in respect of Insurance Brokerage activities.

1-30

Retrocession: The Reinsurer ceding to another Reinsurer the liability of the risk it has accepted pursuant to the reinsurance contract.

1-31

Regulations: Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank or by the competent authority in the State.

1-32

Register: The register of Insurance Brokers at the Central Bank.

1-33

Risk Governance Framework: As part of the overall approach to Corporate Governance, the framework through which the Insurance Broker’s Representatives and Senior Management establish and make decisions about the Insurance Broker’s strategy and risk approach, and identify, measure, manage and control risks.

1-34

Senior Management: The individuals or body responsible for managing the Insurance Broker on a day-to-day basis in accordance with strategies, policies and procedures set out by the Insurance Broker’s Representatives, generally including, but not limited to, the chief executive officer, chief financial officer, heads of Control Functions and branch managers.

1-35

Specialised Employee: The employee appointed by the Insurance Broker and approved by the Central Bank to conduct core Insurance Brokerage activities in specific types/lines of business, based on their qualifications and experience.

1-36

Staff: All the Persons working for an Insurance Broker including the members of Senior Management, except for the Insurance Broker’s Representatives, or their equivalent.

1-37

State: The United Arab Emirates.

1-38

Takaful Insurance: A collective contractual arrangement aiming at achieving cooperation among a group of participants against certain risks whereby each participant pays certain contribution to form an account called the participants' account through which entitled compensations are paid to the member in respect of whom the risk has realized. The Takaful Insurance Company shall manage this account and invest the funds collected therein against certain compensation.

2-1

No Person shall provide or engage in Insurance Brokerage within the State without being Licensed by the Central Bank.

2-2

No Company shall engage with any Person to obtain Insurance Brokerage services, unless such a Person is Licensed by the Central Bank.

2-3

Applicants must apply for one of the following categories of licensing:

a. 

category I licensing: 

(Primary insurance operations);

b.

category II licensing: 

(Reinsurance operations); or

c.

category III licensing: 

(Primary insurance operations and reinsurance operations).

2-4

Applicants must be:

a. 

incorporated in the State in accordance with the Decretal Federal Law No. (32) of 2021 on Commercial Companies, having the objective of practicing the Insurance Brokerage activity; or

b. 

a branch of a company incorporated in a Financial Free Zone with presence in the State; or

c. 

a branch of a foreign company with presence in the State.

2-5

Applicants applying under paragraphs (b) and (c) of Article (2.4) must be:

a. 

licensed to practice Insurance Brokerage in a Financial Free Zone in the State or in the country of origin, in the same type of insurance;

b. 

subject to the control of a supervisory authority, with a minimum five (5) years of practice in Insurance Brokerage;

c.

have presence in the State;

d.

subject to any controls or conditions set by the Central Bank; and

e.

Insurance Brokerage operations by Financial Free Zones licensed brokers for re-insurance business carried out in the Financial Free Zones are not required to be licensed by the Central Bank.

2-6

To be Licensed by the Central Bank an Applicant must submit the documents listed hereinafter:

a.

a completed application form;

b.

strategy overview;

c. 

a statement describing the added value that the Applicant will bring to the UAE insurance market;

d. 

business plan, including:

I.

Conflict of Interest policy;

II.

reporting lines; and 

III.

technology infrastructure, Outsourcing arrangements, data warehousing arrangements and webhosting;

e.

information and cyber security arrangements;

f.

training and Emiratization plan for UAE nationals;

g. 

ownership details including the following:

I.

details of the proposed natural Persons to fill the positions of the Insurance Broker’s Representatives;

II.

proof of identity for partners (a minimum of two (2) separate documents); and

III.

details and proof of identity (as above) for the ultimate beneficial owner.

h. 

the background and experience of Senior Management, including CVs of Senior Management and Specialized Employees;

i. 

proof of satisfying the Fit and Proper Process requirements by natural Persons proposed for the Insurance Broker’s Representatives, Senior Management, Specialized Employees and other natural Persons as determined by the Central Bank from time to time;

j. 

audited financial statements (for the past three (3) years, if available);

k. 

proof of ownership or the authenticated lease of the property that the Insurance Broker’s intends to use as headquarters in the State, along with a description of the proposed software and technical systems;

l.

exit strategy and plan;

m.

measures that the Insurance Broker has in place to ensure the complete compliance with anti-money laundering and combating the financing of terrorisim and financing of illegal organisations laws and regulations or laws related to other unlawful activities; including but not limited to:

I.

comprehensive and effective policies, procedures and controls are in place to address money laundering and terrorist financing risks;

II.

ability to identify, assess, understand and mitigate money laundering and terrorist financing risks to which they are exposed;

III.

sufficient know your customer (KYC), customer due diligence (CDD) and enhanced due diligence (EDD) are in place;

VI.

to be guided by the Financial Action Task Force (FATF) Standards on anti-money laundering and countering the financing of terrorism and proliferation.

n.

proof of payment of application fee; and

o.

a declaration that the Insurance Broker’s Representatives or equivalent, satisfy the requirements of Article (15) of Decretal Federal Law No. (48) of 2023 Concerning the Organization of Insurance Operations.

2-7

In addition to the requirements stipulated in Article (2.5) branches of foreign Insurance Brokers and Insurance Brokers established in Financial Free Zones must submit the following:

a. 

the certificate of incorporation issued by the competent authority showing the Insurance Broker’s incorporation and licensing to practice Insurance Brokerage in the types and lines of business applied for;

b. 

a copy of the audited financial statements for the last two (2) years, prepared and audited in the UAE; and

c. 

a certified copy of the Insurance Broker’s Representatives decision approving the establishment of a branch in the UAE mainland.

2-8

The Central Bank may request the Applicant to provide further information as part of the process.

2-9

An Applicant must meet the minimum capital requirements per licensing category, as follows:

a. 

three million (3,000,000) AED for the Insurance Broker established in the State. The share of UAE nationals in the capital must not be less than fifty one percent (51%) of the total paid up capital.

b. 

ten million (10,000,000) AED for the branch of an Insurance Broker established in a Financial Free Zone in the State or a foreign branch; and

c. 

The Central Bank may require that certain Insurance Brokers must meet higher capital and national shareholding requirements, based on their size, complexity and nature of their operations.

2-10

An Applicant must provide a bank guarantee favouring the Central Bank from a bank licensed in the State, provided that the value of the bank guarantee at any point in time shall not be less than the following:

a. 

three million (3,000,000) AED for the Insurance Broker established in the State, and one million (1,000,000) AED for each additional branch;

b. 

five million (5,000,000) AED for the Insurance Broker established in a Financial Free Zone in the State or a foreign branch, and three million (3,000,000) AED for each branch of the Insurance Broker; and

c. 

an Applicant/ Insurance Broker must increase the value of the bank guarantee favouring the Central Bank as required under Articles (2.10.a) or (2.10.b) of this Regulation upon receiving a letter from the Central Bank demanding an additional bank guarantee. The additional bank guarantee must be submitted to the Central Bank within the deadline stipulated in the letter.

d. 

The bank guarantee stated in this Article is in addition to the minimum capital requirements.

2-11

An Applicant/Insurance Broker must obtain a professional indemnity insurance policy, according to the following conditions:

a. 

issued by a Company licensed by the Central Bank, after the Central Bank's approval on the terms and conditions of such policy;

b. 

the insured must be the Insurance Broker and the Beneficiary must be the Central Bank;

c. 

issued for the purpose of guaranteeing any liability arising from damages resulting from practicing Insurance Brokerage operations, in case of unintentional acts or omissions and negligence;

d. 

valid throughout the License term and applicable to the annual renewal of the licensing; and

e. 

the insured sum under the policy must not be less than two million (2,000,000) AED for Insurance Brokers incorporated in the State, provided that the deductible amount does not exceed thirty thousand (30,000) AED for each incident. As for the branch of a foreign Insurance Broker or Insurance Broker incorporated in any Financial Free Zone, the insured sum under the policy must not be less than three million (3,000,000) AED, provided that the deductible amount must not exceed fifty thousand (50,000) AED for each incident.

2-12

Amending the terms and conditions of the professional indemnity insurance policy stipulated in Article (2.11) is subject to the Central Bank’s written approval.

2-13

An Applicant must pay the prescribed fees pursuant to Cabinet Resolution No. (23) of 2009 Concerning Fees for Supervision, Control and Insurance Transactions.

2-14

a. 

The Central Bank shall communicate its decision within (20) business days considering the merits of the application and approve it with or without conditions and limitations or reject the application stating the reasons for the rejection.

b. 

The Central Bank may reject the application if it concluded that there is no added value to the UAE insurance market as it deems appropriate for the need of the national economy, if a License was granted to the Applicant.

2-15

Once an Applicant satisfies all the requirements, it shall be granted a License.

2-16

a. 

The term of a License shall be one (1) year and must be renewed annually at least one (1) month prior to the expiration date based on the submission of a renewal application and paying the prescribed fees.

b. 

The Central Bank may revoke the License if the Insurance Broker failed to comply with Paragraph (a) of this Article.

2-17

Branches of the Insurance Broker must not be established without the prior written consent of the Central Bank. No permission for a new branch is granted by the Central Bank unless the financial conditions of the Insurance Broker are sound and the Insurance Broker has not committed any violations. . The current regulation concerning the elapse of the impact of disciplinary sanctions shall be taken into consideration in this regard. Licensing requirements for branches of Insurance Brokers, are as follows:

a.

an undertaking to provide the title deed of the premises of the branch or its lease contract approved by the concerned authorities;

b. 

approval of the competent authority in the relevant Emirate;

c. 

a declaration from the branch manager that he/she is fully responsible for the actual management of the branch;

d. 

a statement showing the technical equipment in the branch, as well as a list of the names and job titles of Staff;

e.

a statement showing the premium volume achieved in the fiscal year preceding the submission of the application, provided that the volume of premiums in the previous fiscal year is not less than three million (3,000,000) AED;

f.

a period of no less than two (2) years has elapsed since the Insurance Broker was Licensed, during which it actually practiced Insurance Brokerage, and no penalties or administrative violations were imposed on it;

g.

a declaration that the new branch will operate under the direct supervision of the chief executive officer; and

h.

a letter of bank guarantee according to Article (2.10.a) of this Regulation.

2-18

The Insurance Broker must obtain the necessary local licenses and commence its activities within six (6) months of the date of licensing by the Central Bank under this Regulation. The Central Bank must be provided with a copy of the licenses issued by local authorities as soon as they are obtained.

3-1

The Central Bank may at any time revoke, suspend, restrict or vary the License if any of the following circumstances materializes:

a.

the Insurance Broker does not comply with any condition of the licensing conditions;

b.

the Central Bank has been provided with false, misleading or inaccurate information by or on behalf of the Insurance Broker or any of the Insurance Broker’s Representatives;

c.

the interests of Clients or potential Clients of the Insurance Broker are in any way threatened, whether by manner in which the Insurance Broker is conducting its business or for any other reason;

d.

an order for the liquidation of the business of the Insurance Broker or any of the Insurance Broker’s Representatives has been made by a competent judicial/supervisory authority or the voluntary liquidation of the Insurasnce Broker;

e.

a receiver or manager or any similar officer of the Insurance Broker has been appointed by a judicial authority;

f.

a bankruptcy order or judgment has been made in respect of the Licensed Insurance Broker;

g.

the Insurance Broker suspends its activities for a period of six (6) consecutive months;

h.

the Insurance Broker, in the opinion of the Central Bank, is unable to pay its debts as they fall due or the value of its assets is, in the opinion of the Central Bank, is less than the amount of its liabilities, taking into account its contingent and prospective liabilities;

i.

execution or other process is issued on a judgment decree or order to sell its assets or part thereof by any court and is returned unsatisfied in whole or in part;

j.

the Insurance Broker does not start activities within six (6) months from licensing; or

k.

the Insurance Broker provided false or misleading information or concealed or failed to disclose material facts in the application.

3-2

Upon the lapse of three (3) months from the date of revocation, and after satisfying all the Insurance Broker’s liabilities, the letter of guarantee and the professional indemnity policy shall be terminated, upon the issuance of a decision in that regard by the Central Bank.

4-1

An Insurance Broker must not combine its role in such a capacity on the one hand and the role of any other Insurance-Related Professions on the other hand.

4-2

An Insurance Broker must not be partner or agent of any other Insurance Broker.

4-3

An Insurance Broker must notify the Central Bank of the appointment of any Specialised Employees, and of any modification or alteration that may arise regarding their transfer or termination, stating the reasons thereof. An Insurance Broker must also notify the Central Bank once any of the Specialised Employees become vacant and an alternative must be appointed until such vacant post is permanently filled within a maximum period of thirty (30) days from the date of vacancy.

4-4 

An Insurance Broker must have:

a.

adequate Staff who possess the requisite qualifications, competencies and skills to individually and collectively provide the range of services in all lines of business in which the Insurance Broker is Licensed to operate; and

b.

at least one Specialized Employee for each Licensed insurance type/line of business at all times.

4-5

An Insurance Broker must fully comply with the following obligations on an ongoing basis:

a.

the Insurance Broker’s legal status, its ownership and capital or its premises must not be altered without the prior written approval of the Central Bank;

b.

dealings between the Insurance Broker and its Clients must be supported by official documents for all Insurance Brokerage operations;

c.

the Insurance Broker must not encumber any of its assets without the prior written approval of the Central Bank;

d.

any of the Insurance Broker’s Representatives must not withdraw any amount from the Insurance Broker in excess of his/her share of the annual net profit; to this end current accounts connected to Insurance Brokers for withdrawal/ cash injection purposes are prohibited;

e.

the Insurance Broker’s Representatives, or Senior Management or any of their equivalents must not borrow from the Insurance Broker or lend to any Person any of the Insurance Broker’s funds; and

f.

the Insurance Broker must provide, upon the Central Bank’s request, all data, information, documents or statistics, at any time and for any specified period. Such information must be identical to the records of the Insurance Broker and must be treated as confidential information by the Insurance Broker.

g.

the Insurance Broker must have the necessary policies and procedures that ensure updating the unsernames and passwords for the users that are authorized to access the electronic platforms supplied by the Companies to sell insurance policies, and to cancel them for the Staff that were terminated.

5-1

Fit and Proper Process criteria include the following:

a.

satisfying the requirements of Article No. (15) of Decretal Federal Law No. (48) of 2023 Concerning the Organisation of Insurance Operations;

b.

meeting the necessary qualifications, knowledge and experience requirements;

c.

having a record of integrity, competence and financial soundness;

d.

having sufficient time to fully discharge their responsibilities;

e.

not having any Conflict of Interest; and

e.

passing the assessment determined by the Central Bank for this purpose.

5-2

Demonstration of integrity, competence and financial soundness, which includes the following:

a.

satisfying the requirements of Article (15) of Decretal Federal Law No. (48) of 2023 Concerning the Organization of Insurance Operations;

b.

being of good conduct and behavior, and never having been sentenced to a freedom restricting punishment for a moral turpitude crime without being rehabilitated; and

c.

not having stopped the payment of commercial debts even if not associated with bankruptcy declaration, or not having been judged bankrupt without being rehabilitated.

5-3

Senior Management must have the following qualifications and experience, as a minimum:

a.

For the chief executive officer or equivalent:

I.

hold a bachelor’s degree or equivalent, or the (ACII) designation from the Chartered Insurance Institute of London, or an advanced diploma accredited by a similar professional institute;

II.

have successfully completed three (3) training courses in insurance or Insurance Brokerage; and

III.

have a minimum practical experience of ten (10) years in insurance/Insurance Brokerage activities, and no less than five (5) years if he/she holds a higher academic qualification. The experience requirement for a UAE national shall be a minimum of five (5) years and two (2) if he/she holds a higher academic qualification.

b.

For Control Functions:

I.

hold a bachelor’s degree or equivalent, or an accredited professional financial certificate approved by the Central Bank; and

II.

have practical experience in risk management, internal or external audit, and has previously taken part in the audit of Companies or Insurance Brokers for no less than three (3) years, or two (2) years if he/she holds a higher educational qualification or if he/she is a UAE national.

c.

For Senior Management that does not fall under the above-mentioned items (a) and (b) including but not limited to operations manager, and branch manager:

I.

hold a bachelor’s degree or equivalent; and

II.

have a minimum practical experience of six (6) years in insurance/Insurance Brokerage, and no less than three (3) years if he/she holds a higher academic qualification. The experience requirement for a UAE national shall be a minimum of two (2) years, and one (1) year if he/she holds a higher academic qualification.

5-4

A Specialised Employee must have the following qualifications and experience, as a minimum:

a.

hold a bachelor’s degree or equivalent;

b.

have a minimum practical experience of five (5) years in the field of the Licensed type or class of insurance/Insurance Brokerage. The experience requirement for a UAE national shall be a minimum of three (3) years in the said fields.

5-5 

Academic degrees must be accredited as equivalents by the competent authority in the State.

5-6

An Insurance Broker must submit an annual report along with the application to renew the License pursuant to Article (2.16) of this Regulation that contains proof of completion of fifteen (15) hours of continuing professional development for the Insurance Broker’s Representatives, Senior Management and Specialised Employees. In this context, continuing professional development includes attending insurance/ Insurance Brokerage related conferences, training programs and workshops.

5-7

The Insurance Broker’s Representatives, Senior Management, Specialised Employees and Staff meet the Fit and Proper Process’ requirements on an on-going basis.

5-8

On a cas-by-case basis, the Central Bank shall have the right to exempt nominees to fill any of the positions stated in this Article from any conditions, upon the sole discretion of the Central Bank.

6-1 

Insurance Brokers must enter into and maintain valid Insurance Brokerage agreements with at least two (2) Companies. Such agreements must be fair, disclose all material contractual rights and obligations for parties involved and signed by the authorised Persons of both parties.

6-2

The Insurance Brokerage agreements must address the following matters, as a minimum:

a.

duration, the reasons for termination and the methods for termination;

b.

types and lines of business;

c.

geographical area; and

d.

the type of remuneration, the methods of its calculation and due dates of its payment.

6-3

The Insurance Brokerage agreement must not include any of the following terms:

a.

terms that make the Insurance Broker responsible for any Premiums unpaid by the Clients. Any agreements/ arrangements (written or otherwise) that are entered into outside the scope of the Insurance Brokerage agreements that contain such terms, will subject the Insurance Broker and the Company to disciplinary action by the Central Bank;

b.

authorization to the Insurance Broker to issue insurance policies or endorsements thereto, or to amend policies or endorsements except for the issuance of motor Insurance Certificates if both parties choose to do so; and

c.

terms that prevent the Insurance Broker from practicing its activity with any other Company.

6-4

Premium collections from the insured Persons remain the responsibility of the Company at all times.

6-5

The Central Bank may require amending certain terms and conditions of the Insurance Brokerage agreements, on a case-by-case basis, as it deems appropriate for safeguarding public interest.

7-1

Premiums generated from all types/lines of primary insurance business must be paid directly by Clients to Companies. Insurance Brokers must instruct Clients to this effect in writing prior to inception, and retain records to show the Clients’ acknowledgment to this condition. Insurance Brokers are prohibited from collecting Premiums under any circumstances.

7-2

Premiums generated from reinsurance operations are subject to the reinsurance brokerage agreement concluded between the Reinsurer and the Insurance Broker.

7-3

Claim Settlements and Premium refunds resulting from all types of primary insurance business must be paid directly by Companies to Clients. Insurance Brokers are prohibited from collecting Claim Settlements or Premium refunds.

7-4

Claim Settlements and Premium refunds resulting from all types of reinsurance business are subject to the reinsurance brokerage agreement concluded between the Reinsurer and the Insurance Broker.

7-5

Insurance Companies and Insurance Brokers must establish and maintain all the necessary electronic means to facilitate the application of this Article.

7-6

a. 

When the Insurance Broker conducts Insurance Brokerage undertakings that lead to the conclusion of an Insurance Policy with a certain Client, then the Insurance Broker becomes entitled to receive Remuneration from the Company upon inception and renewal of the Insurance Policy, as long as the Insurance Brokerage agreement is valid.

b.

I. 

Companies are prohibited from communicating directly or indirectly with the Clients of the Insurance Broker, whether during inception or at renewals for the purpose of depriving it from its Remuneration.

II.

Notwithstanding what it stated in the former sub-Article (I) of this Article, Companies may communicate with Clients of Insurance Brokers if Clients owe due and unpaid premiums or instalments thereof to the Company.

7-7 

a. 

A Company must pay the due Remuneration to the Insurance Broker within the time specified in the Insurance Brokerage agreement, which in all cases must not exceed ten (10) business days from the date of receipt of such payment(s) of premium(s) by the Company.

b.

If the premium was to be paid through instalments, then the Company must pay the Insurance Broker its share of each instalment within the time specified in the Insurance Brokerage agreement, which in all cases must not exceed ten (10) business days from the date of receipt of such instalment.

c.

Notwithstanding what is stipulated in paragraph (b) of this Article, Insurance Authority Board of Directors’ Decision No. (49) of 2019 Concerning Instructions for Life Insurance and Family Takaful Insurance applies to life insurance and family Takaful Insurance policies.

8-1

Excluding the first year of licensing, the net equity of an Insurance Broker must not be less than hundred percent (100%) of the paid capital, at all times.

8-2

If the net equity falls below hundred percent (100%) of the paid capital, the Insurance Broker must notify the Central Bank immediately and submit a plan to the Central Bank to re-establish the required level of the net equity within fifteen (15) days from breaching the aforementioned threshold.

8-3

The Central Bank may take the measures it deems necessary towards the Insurance Broker in the event of net equity falls below hundred percent (100%). The Insurance Broker’s Representatives must inform the general assembly or its equivilant to either increase the capital to re-establish the required level of the net equity within the time specified by the Central Bank, or to liquidate the establishment.

8-4

An Insurance Broker must not undertake new Insurance Brokerage activities until it reestablished the required level of the net equity. The Insurance Broker must honor its existing commitments towards Clients and Companies at all times during the period of re-establishment of the required level of the net equity.

8-5

Dividends to the Insurance Broker’s Representatives or any form of profits repatriation to the head office of the Insurance Broker is subject to the Central Bank’s prior written approval, upon ensuring that the Insurance Broker has fulfilled the financial soundness requirements. the Insurance Brtoker’s Representatives may only receive dividends or withdraw any amounts of money or any of the corporation’s assets, surplus/profit, provided that the net equity amounts more than hundred percent (100%) of the paid capital.

8-6

Liquid assets must not be less than hundred percent (100%) of current liabilities.

8-7

Cash must not be less than twenty five percent (25%) of net liabilities.

8-8 

The bank guarantee stated in Article (2.10) and/or the amount of money reserved in return of granting the bank guarantee does not form part of the assets that can be used to satisfy the requirements of Artilces (8.6) and (8.7).

8-9

If the requirements provided for in Articles (8.6) and (8.7) are not met, the Insurance Broker must submit a plan to the Central Bank to rectify its position within fifteen (15) days of notifying it of such non-compliance. The plan must include the measures to be taken and the time required. The Central Bank may accept or reject the plan, or require additional measures to be taken.

8-10

If the Insurance Broker does not execute the plan referred to in Article (8.9) within the specified timeframe, the Central Bank shall take the necessary measures towards the Insurance Broker, as it may deem fit.

8-11

In case there is a surplus of the paid capital to the minimum capital requirement, the capital may not be reduced without the Central Bank’s approval, based on the level of financial soundness of the Insurance Broker.

8-12

Title/ownership of all assets of the Insurance Broker must be vested exclusively in the Insurance Broker.

9-1

An Insurance Broker must have in place effective, robust and well-documented Corporate Governance arrangements, including a clear organizational structure with well-defined, transparent and consistent lines of responsibility.

9-2

The Corporate Governance arrangements referred to in Article (9.1) must be comprehensive and proportionate to the nature, scale and complexity of the operations of the Insurance Broker, and must contain, at a minimum:

a.

an organization chart showing each division, department or unit, indicating the name of each responsible individual accompanied by a description of the respective function and responsibilities;

b.

controls on Conflicts of Interest;

c.

controls on integrity and transparency of the Insurance Broker’s operations;

d.

controls to ensure compliance with Central Bank Laws and Regulations;

e.

methods for maintaining confidentiality of information;

f.

procedures for regular monitoring and auditing of all Corporate Governance arrangements;

g.

a professional code of conduct for the Insurance Broker’s Representatives and Staff, to ensure their compliance with Central Bank Laws and Regulations; and

h.

a whistleblowing policy mechanism to ensure protection of Staff who raise concerns from detrimental treatment or reprisals.

9-3

An Insurance Broker’s organisational structure must incorporate a “three lines of defence” approach comprising of:

a.

the business lines;

b.

the risk and compliance functions; and

c.

independent internal audit function.

10-1

An Insurance Broker must have in place an appropriate Risk Governance Framework that includes policies, processes, procedures, systems and controls to identify, measure, evaluate, monitor, report and control or mitigate material sources of risk on a timely basis.

10-2

The Risk Governance Framework must address, amongst other key risks, the following areas:

a.

operational risk;

b.

conduct risk;

c.

insurance fraud;

d.

cybercrime and attacks; and

e.

money laundering and terrorist financing.

10-3

An Insurance Broker’s definition and assessment of material risks must take into account nature, scale and complexity of its operations.

10-4

An Insurance Broker must have in place mitigating action plans for key material risks and monitor them on an ongoing basis.

10-5

The Insurance Broker’s Representatives are ultimately accountable for the Risk Governance Framework.

10-6

An Insurance Broker’ Risk Governance Framework must be:

a.

kept up-to-date;

b.

reviewed annually; and

c.

proportionate to the nature, scale and complexity of their operations.

10-7

An Insurance Broker must have an Internal Controls system that ensures effective operations, adequate control of risks, prudent conduct of business, reliability of financial and non-financial information reported and compliance with Central Bank Laws and Regulations.

10-8

a.

An Insurance Broker must have effective Control Functions with the necessary independence, authority and resources covering risk management, compliance and internal audit. The effectiveness of the Control Functions must be assessed periodically by the Insurance Broker’s Representatives.

b.

Control Functions must have an appropriate level of authority. The head of the Control Function must not participate in operational business responsibilities, such as underwriting, sales or accounting.

c.

Control Functions must avoid Conflicts of Interest. Where any conflicts remain and cannot be resolved by Senior Management, they must be brought to the attention of the Insurance Broker’s Representatives for resolution.

10-9

The existence of Control Functions does not relieve the Insurance Broker’s Representatives of their responsibilities.

10-10

The head of each Control Function must have access to the Insurance Broker’s Representatives and must submit periodic reports on the matters determined by them.

10-11

Heads of Control Functions must submit annual reports to the Central Bank, as follows:

a.

risk management function:

I.

assessment of risk positions, exposures and the steps being taken to manage them;

II.

risk management issues resulting from strategic affairs of the Insurance Broker such as corporate strategy, mergers and major projects; and

III.

assessment of risk events and the identification of appropriate remedial actions and the assessment of results after implementation.

b.

compliance function:

I.

assessment of the key compliance risks the Insurance Broker faces and the steps being taken to address them;

II.

assessment of how the various parts of the Insurance Broker such as divisions, major business units are performing against compliance standards and goals;

III.

any compliance issues involving management or Persons in positions of major responsibility within the Insurance Broker, and the status of any associated investigations or other actions being taken.

c.

Internal audit function:

I.

assessment of all material areas of risk, including, but not limited to, concentration of risk, operational risk, risk-mitigation techniques and conduct of business;

II.

ensuring that controls are in place to preserve the assets of the Insurance Broker, preventing fraud and assessing the effectiveness of the controls in place in this regard; and

III.

assessing the reliability and efficiency of the accounting, financial, risk and compliance reporting information and the effectiveness of the controls in place.

12-10 

The heads of risk management, compliance, and internal audit must promptly report to the Central Bank any violations of the Central Bank Laws and Regulations, and any Matters of Significance. Heads of risk management, compliance and internal audit making such reports in good faith shall not be considered to have breached any of their obligations.

13-10 

The Insurance Broker must not dismiss the head of Control Functions without first obtaining the non-objection of the Central Bank.

14-10 

Insurance Brokers must promptly notify the Central Bank in case of resignation of their heads of risk management, compliance or internal audit and the reasons thereto.

15-10 

Outsourced activities must remain fully in scope of the Insurance Broker’s Control Functions’ responsibilities.

16-10 

Excluding Control Functions, an Insurance Broker may combine positions at the Insurance Broker, subject to the Central Bank’s approval. The Central Bank shall approve the combination of positions on a case-by-case basis, with due consideration of the size, complexity, volume and lines of business of the Insurance Broker.

11-1

An Insurance Broker must appoint an external auditor approved by the Central Bank to audit, on an annual basis:

a.

the financial statements or consolidated financial statements of the Insurance Broker prepared in accordance with the accepted accounting standards and practices.

b.

the systems and controls of the Insurance Brokerage operations provided by the Insurance Broker.

11-2

Upon request by the Central Bank, the appointed external auditor must submit, directly or through the Insurance Broker, a report of the audit in a form and within a timeframe acceptable to the Central Bank.

11-3

In addition to the report of audit, the Central Bank may request from the external auditor to:

a.

submit any additional information in relation to the audit, if the Central Bank considers it necessary; and

b.

enlarge or extend the scope of the audit; carry out any other examination.

11-4

The external auditor must verify from all Companies with whom the Insurance Broker deals with on such accounts, when conducting the audit.

12-1

An Insurance Broker, Insurance Broker’s Representatives and Staff must:

a.

Act in an honest, fair and transparent manner in their relations with Clients.

b.

Act in the best interests of the Client when comparing insurance products in terms of the conditions, rates and the scope of insurance cover, as well as in terms of choosing to work with a certain Company rather than others.

c.

Provide the Company with the accurate and adequate information necessary for underwriting purposes concerning the Client, including Personal Data.

d.

Obtain a written authorization from all of its Clients to perform the Insurance Brokerage business, according to the form designed for this purpose and approved by the Central Bank, and must not restrict the Client’s freedom to cancel the authorization, and not to charge the Client for any financial costs as a result thereof.

e.

When an Insurance Broker recommends a certain Insurance Policy to the Client, such a recommendation must be consistent with the Client’s insurance demands and needs. The Insurance Broker must explain to the Client why a particular Insurance Policy would best meet their demands and needs. The Insurance Broker must also inform the Client when the recommendation was made based on the offer from a single or a limited range of Companies.

f.

Explain to the Client the importance of disclosure of relevant information when submitting an application for insurance; the consequences of concealing or providing inaccurate or invalid data or documents; the need to disclose any subsequent changes that may affect the insurance cover; and the Client’s full responsibility for data, information and documents provided to the Insurance Broker or the Company.

g.

Notify the Client about the following features of the Insurance Policy in a clear, simplified, accurate and not misleading manner, taking into account the knowledge and experience of the Client:

I.

information about the type of insurance;

II.

a summary of the insurance cover, including the main risks insured, the insured sum and, where applicable, the geographical scope and a summary of the excluded risks and any other related information that might influence the Client’s decision;

III.

the means of payment of premiums and the duration of payments;

IV.

main exclusions where claims cannot be made;

V.

obligations of the Client at the start of the contract;

VI.

the term of the Insurance Policy including the start and end dates of the contract; and

VII.

the means of terminating the Insurance Policy.

VIII.

When selling investment linked life insurance policies, the Insurance Broker must inform the Client of the nature of this product and the risks associated with it.

h.

Have in place the necessary electronic systems to support all Insurance Brokerage operations.

i.

Comply with legislation concerning anti-money laundering and combating the financing of terrorism and financing of illegal organisations.

j.

Comply with Regulations concerning consumer protection and code of conduct and ethics to be observed by Companies and Insurance-Related Professions.

k.

Respond to claim filings, provide claim forms and explain the procedures that must be followed by the Client in case the insured risk materialises.

l.

Acknowledge to Clients the receipt of the claim and any missing information and documents within two (2) business days from the receipt of the claim application form.

m.

Inform Clients of the progress of filed claims, at least every fifteen (15) days.

n.

Assist in the negotiations with the Company regarding the claims arising from the occurrence of the insured risks.

o.

Notify the Client immediately in writing of the Company's decision to accept or reject the provision of the insurance cover related to such claims and follow up on them.

p.

Provide technical advice and consultation, and inform the Client in writing of the best conditions and rates of the Companies. An Insurance Broker must keep relevant documentation in duly organized records. In addition, it must negotiate in favour of the Client and represent the Client before the Company without receiving from it any Remuneration for such negotiation.

q.

a comparison between the prices and coverage of Insurance Policies tailored to the Client’s needs and offered by different Companies, then recommend an Insurance Policy and explain to the Client the reason for choosing it and the conditions, benefits, and exclusions it includes;

r.

use official email address belonging to the Insurance Broker.

12-2

Insurance Brokers must handle complaints, as follows:

a.

accept complaints either by phone or in writing (e.g., letters, e-mails, fax);

b.

explain the procedures to be followed when filing a complaint;

c.

provide Clients with the contact reference to follow up on the filed complaint;

d.

respond to Clients’ complaints within two (2) business days from the reception of correspondence; and

e.

have in place an electronic system for recording and monitoring complaints.

12-3

An Insurance Broker must inform the Client in writing within twenty (20) days before the expiry date of the Insurance Policy so that the Client may request in writing the following:

a.

renewal of the Insurance Policy with the same Insurance Broker or not; or

b.

renewal of the Insurance Policy with the same Company under the same conditions, or with the same Company under different conditions, or with another Company according to another proposal presented by the Insurance Broker to the Client.

12-4

An Insurance Broker and its Staff are prohibited from:

a.

engaging in the activities of Insurance-Related Professions other than Insurance Brokerage;

b.

managing or bearing any insurance risks;

c.

assigning the Insurance Brokerage operations to other Insurance Brokers, without obtaining the written consent of the Client and the Company. Multinational operations that require Insurance Brokers Licensed by the Central Bank and brokers from other jurisdictions must ensure compliance with this Regulation;

d.

engaging in soliciting, negotiating or selling an Insurance Policy to a potential Client which unnecessarily replaces an existing Insurance Policy, for the purpose of increasing turnover and generating additional Remuneration (policy churning);

e.

soliciting/ routing Insurance Policies through any Person or entity that is not Licensed by the Central Bank;

f.

concluding any written or oral agreements, including any referral agreements for Remuneration or otherwise, allowing any Person or entity that is not regulated by the Central Bank to use, directly or indirectly, any employees or agents of Licensed entities as intermediaries to solicit Insurance Policies;

g.

Paying, receiving or sharing with any remuneration to/from other Insurance Related Professions practitioners; and

h.

offering any kind of discounts to Clients from the Remuneration they receive from Companies. Insurance Brokers and their Staff must avoid any actions that would lead to market manipulation in terms of pricing. They must implement the Company's underwriting guidelines, and any discounts offered to Clients must come directly from the Company.

i.

sharing, exchanging, disclosing or transmitting of confidential information which the Insurance Broker is authorized to access pursuant to applicable laws and regulations, to any third party.

j.

using unofficial or personal email addresses, such as (Hotmail, yahoo, Gmail., .etc.).

k.

Dealing in cash in any matter related to Insurance Brokerage.

12-5

An Insurance Broker must disclose and explain to the Client before inception, at least the following:

a.

it acts as an Insurance Broker;

b.

it is Licensed and supervised by the Central Bank and can be verified in that capacity;

c.

the type of business for which they are Licensed;

d.

the services provided, including whether they offer products from a full range of Companies, from a limited range or from a single Company;

e.

cancellation rights in respect of the intermediation services;

f.

the nature and basis of Remuneration that it receives from Companies, and when requested by Clients the amount of such especially when selling investment linked life insurance policies;

g.

the terms and conditions of business between themselves and the Client in a fair, clear and not misleading manner;

h.

having entered into Brokerage Agreements with Companies; and

i.

the existence of any potential Conflict of Interest relevant for the Client.

13-1

An Insurance Broker must maintain appropriate records, prepare financial statements inaccordance with the International Financial Reporting Standards (IFRS) and Central Bank Regulations.

13-2

An Insurance Broker must submit within ninety (90) days of the end of the financial year:

a.

a detailed report signed by the Insurance Broker’s Representatives, which must include all the Insurance Brokerage activities undertaken by the Insurance Broker throughout the year; and

b.

final annual financial reports, which must be audited and accompanied by the external auditor’s report.

14-1

The Insurance Broker must submit to the Central Bank the quarterly interim financial statements reviewed by the external auditor and accompanied by the following, as a minimum:

a.

financial disclosures according to the International Financial Reporting Standards (IFRS);

b.

a statement of (debt/credit) accounts distributed according to the due dates;

d.

a statement of the names of the Companies with which the Insurance Broker deals with, which must include the gross Premiums and gross Remuneration, which must be approved and signed by the external auditor;

e.

a statement concerning the number and nature of complaints, the products involved, stated reasons for complaints, resolution rates, and/or where litigation arises from complaints; and

f.

any other information that the Central Bank requires.

g.

An Insurance Broker must submit to the Central Bank an interim report signed by the Insurance Broker’s Representatives on a quarterly basis, which must include all the Insurance Brokerage activities undertaken during the relevant period, within thirty (30) days from the end of the quarter.

14-2

An Insurance Broker must immediately notify the Central Bank on all Matters of Significance, and must present all the relevant documents in that regard.

15-1

An Insurance Broker must keep all necessary records on Personal Data for a period of ten (10) years from the date of receipt of such data, unless otherwise required by other applicable laws or the Central Bank.

15-2

Where any material change affects the accuracy and completeness of information provided in an application, the Applicant or the Insurance Broker, as the case may be, must immediately notify the Central Bank of such change and provide all necessary information and documents.

16.1

Insurance Brokers must have in place and maintain adequate policies and procedures to:

a.

identify, prevent and resolve any data security breaches; and

b.

protect Personal Data.

16-2

Personal Data must be stored and maintained in the State. The Brokers must also establish a safe and secure backup of all Personal Data in a separate location for the required period of retention of ten (10) years.

16-3

Insurance Brokers must comply with applicable regulatory requirements and standards on data protection. They must control, process and retain only Personal Data that is necessary for the provision of Insurance Brokerage services.

16-4

An Insurance Broker may disclose Clients’ Personal Data to:

a.

a third party where the disclosure is made with the prior written consent of the Client or is required pursuant to applicable laws;

b.

the Central Bank;

c.

other regulatory authorities upon a request, following prior approval of the Central Bank;

d.

courts of law in the State;

e.

other governmental bodies which have lawfully authorized rights to access; and

f.

insurance related matters to Companies, the Emirates Insurance Federation and licensed practitioners of Insurance-Related Professions, to the extent they are necessary for underwriting or Claim Settlement.

16-5

An Insurance Broker must adequately manage cyber security risks through the risk governance process. It must commit adequate skilled resources to ensure its capability to identify the risk, protect its critical services against the attack, contain the impact of cyber security incidents and restore the services.

16-6

An Insurance Broker must establish a cyber incident response and management plan to swiftly isolate and neutralize a cyber threat and to resume affected services as soon as possible. The plan shall describe procedures to respond to plausible cyber threat scenarios.

17-1

When Outsourcing services and processes to service providers Insurance Brokers must contractually ensure that such third parties comply with the requirements of this Regulation.

17-2

Insurance Brokers must remain fully liable for any acts of the service providers.

17-3

Insurance Brokers are responsible for maintaining appropriate training and qualifications of their service providers.

17-4

Outsourcing material business activities is subject to the non-objection of the Central Bank. When requesting the non-objection of the Central Bank for Outsourcing business activities, Insurance Brokers must provide the Central Bank with the following at a minimum:

a.

a brief explanation of the business activity to be Outsourced;

b.

a summary of the materiality assessment;

c.

a summary of the risk assessment;

d.

a summary of the due diligence performed and its outcome;

e.

a confirmation of the agreement of the internal audit function and the compliance function;

f.

an overview of any closely related Outsourcing agreements; and 

g.

evidence of the approval of the proposed Outsourcing by the Insurance Broker’s Representatives. The Central Bank within (20) business days will either grant the non-objection, request further information, or decline the request.

17-5

The Central Bank will assess requests for non-objection on their individual merits on a case-by-case basis, and may or may not permit the Outsourcing of business activities, and key management and Control Functions. Insurance Brokers are encouraged to discuss their material Outsourcing plans early and coordinate with the Central Bank to avoid the non-objection process delaying the Outsourcing.

17-6

An Insurance Broker must not Outsource any activities outside the State.

18-1

set caps on Remuneration (for certain lines of business);

18-2

liquidate bank guarantees for Insurance Brokers who are not able to meet their liabilities; and

18-3

increase or decrease the minimum capital and bank guarantee requirements for Insurance Brokers, depending on the nature, scale, complexity of their operations and their ability to meet their liabilities, on a case-by-case basis.

18-4

increase the minimum percentage of the UAE national shareholding requirements to the total paid up capital of the Insurance Broker.

19-1

An Insurance Broker must not merge, amalgamate or enter into a joint venture with any Person, without the prior written approval of the Central Bank.

19-2

An Insurance Broker may submit a voluntary cancellation request by submitting the following documents:

a.

a letter explaining the reasons for cancellation and the plan for closure;

b.

the partners’ approval of the cancellation decision;

c.

clearance letters from the Companies that the Insurance Broker is dealing with; and

d.

After the approval from the Central Bank, an announcement must be published in two daily newspapers in the State, one in Arabic and the other in English, including the commencement of cancellation procedures and inviting those who object to the cancellation. The external auditor of the Insurance Broker must confirm that there no liabilities towards Companies or Clients, or all liabilities have been settled.