Chapter Twelve: Insurance Companies of Persons and Fund Accumulation Operations
Article (53): Policies Issued by Insurance Companies
The companies engaged in insurance business for persons and fund accumulation operations may not differentiate between the policies issued of the same type; in terms of insurance rates, or the proportion of profits distributed to policyholders or other requirements, unless such differentiation arises from a life expectancy variations for policies where the lifetime has an effect, except for:
1)
Reinsurance policies;
2)
Insurance Policies of amounts that enjoy certain discounts according to the price lists communicated to the CBUAE; and
3)
Insurance Policies that include special conditions on the life of members of a single family or a group of individuals related by a single profession or job or any other social relation.
Article (54): Insurance Policy Rate Discount
The CBUAE may, based on the Company’s request, agree to the issuance of policies at discounts compared to the normal prices, if there are reasons justifying the same.
Article (55): Assessment of Value of Liabilities
The Companies that carry out the insurance of persons and fund accumulation operations shall examine the financial position of this type of insurance and assess the value of its obligations at least once every (3) three years by an Actuary, as of the business commencement date.
This assessment shall cover all insurance operations concluded by the Company inside and outside the State separately. If the activity is carried out by a branch of a foreign Company, the assessment shall be limited to the operations whose contracts were concluded in the State or carried out therein.
Article (56): Examination of Financial Position
The assessment referred to in Article (55) above shall be conducted whenever the Company wishes to examine its financial position to determine the percentages of profits to be distributed to shareholders or policyholders, or whenever it wishes to announce this position.
The CBUAE may request that this assessment be made at any time before (3) three years, provided that a period of not less than one year has lapsed from the date of the last examination.
Article (57): Data of the Actuary’s Report
The financial directives of Insurance Companies issued by the Board, pursuant to this Decree-Law, shall set the data required to be included in the Actuary’s report on the result of the assessment and examination referred to in Articles (55) and (56) above.
Article (58): Attachments of the Actuary’s Report
The Company shall send to the CBUAE a copy of the Actuary’s report on the result of the examination and assessment referred to in Articles (55) and (56) above, within six months from the expiry of the period for which the examination was conducted, accompanied by the following:
1)
A statement of valid Insurance Policies concluded by the Company inside or outside the State on the date of conducting the examination. If the activity is carried out by a branch of a foreign Company, the statement shall be limited to the policies concluded or implemented in the State.
2)
A declaration by persons in charge of the Company’s management that all data and information necessary to access a correct report have been provided to the Actuary.
Following the expiry of the six-month period, as referred to in this Article, an additional period may be given to the Company to submit this report, provided that this period does not exceed three (3) months.
Article (59): Reexamination of Financial Position
If it becomes clear to the CBUAE that the Actuary’s report does not reflect the true financial position of the Company, the CBUAE may request a reexamination at the Company’s expense by an Actuary selected by the CBUAE for this purpose.
Article (60): Distributable Funds
1)
Companies that engage in the insurance of persons and fund accumulation may not deduct, whether directly or indirectly, any part of their funds corresponding to their obligations arising from the Insurance Policies to distribute it as dividend to shareholders or Policyholders, or to pay any amount beyond their obligations under the Insurance Policies it issued. The distribution of dividend shall be limited to the amount of money in excess, as determined by the Actuary in their report, after conducting the examination referred to in Article (57) above.
2)
For the purpose of applying the provisions of this Article, the Company’s funds in the State and abroad may be considered as an integral unit, without prejudice to the provisions of Article (23) above.
Article (61): Savings Bonds
The Companies that engage in the insurance of Persons and fund accumulation may not issue savings bonds for a period exceeding thirty (30) years. If the duration of a bond is (25) twenty-five years or more, the value of its redemption after the twenty fifth year (25) may not be less than the amount of the full mathematical reserve. The Premiums to which savings bondholders are committed must be of equal or declining value.
Article (62): Data of Savings Bonds
Savings bonds shall provide for the termination conditions that the Company invokes vis-à-vis a bondholder due to their delay in paying the Premiums.
However, the contract may be terminated before the lapse of (3) three months from the due date of the Premium and the bondholder failing to pay the premium. In case the bond is nominal, such period shall apply from the date of notifying the bondholder by way of a registered letter.
Such bonds shall provide for the devolution of rights thereto to the Beneficiaries due to the bondholder’s death, without imposing additional amounts or new requirements.
The CBUAE shall determine other data that must be included in the savings bonds.
Article (63): Assessment of Insurance Policy Value
In the event of the bankruptcy of the Company engaged in the insurance of Persons or fund accumulation, the amounts due to each of policyholder not yet expired shall be assessed to equate the mathematical reserve thereto on the day of announcing the bankruptcy verdict or the liquidation decision calculated according to the technical basis of the Premiums at the time of concluding the policy.
Article (64): Insurance Companies Operating in Financial Free Zones
Insurance Companies licensed to operate in the Financial Free Zones may not carry out any activity outside such zones in the State, except for reinsurance.
Article (65): Insurance-Related Professions
No Person may practice as an Insurance Agent, Insurance Broker, Surveyor and Loss Adjuster, Insurance Consultant, Actuary, health insurance claims manager or any other professions related to insurance without obtaining the license or permit to practice the profession and being registered in the register designated for such purpose, and in accordance with the conditions determined by the Board, which include determining the liability of Insurance-Related Professionals and organizing their business and the conditions of their registration in the register.