The Central Bank seeks to promote the effective and efficient development and functioning of the insurance sector. To this end, Companies are required to have a comprehensive approach to Risk Management and effective Internal Controls, including Board and Senior Management oversight, to ensure their resiliency and enhance overall financial stability.

Risk Management, internal audit, compliance, and actuarial functions constitute key control functions in a Company. The control functions have a responsibility, independent of the management of the Company's business lines, to provide objective assessment, reporting and/or assurance. The control functions (as defined in article 1.11) are an essential foundation for effective corporate governance.

In introducing this Regulation and the accompanying Standards, the Central Bank intends to ensure that Companies' approaches to Risk Management and Internal Controls are in line with leading international standards and industry best practice.

This Regulation and the accompanying Standards establish an overarching prudential framework for Risk Management and Internal Controls. Standards and supervisory expectations for selected specific risks are, or will be, established in other Regulations.

This Regulation and the accompanying Standards are issued pursuant to the powers vested in the Central Bank under the Central Bank Law.

This Regulation and the accompanying Standards supplement Federal Law No. (6) of 2007 Concerning the Organization of Insurance Operations, as amended, and its Executive Regulations, Insurance Authority's Board of Directors' Decision No. (19) of 2020 Concerning the Guidance Manual for Insurance Companies and Related Professions to Submitting the Data, information and Supervisory Reports, Insurance Authority Board of Directors' Resolution No. (11) of 2016 Concerning the Revision of the Pricing Policy Applied by a Company in the Classes of Property and Liability Insurance, Insurance Authority Board of Directors' Decision No. (49) of 2019 Concerning Instructions for Life Insurance and Family Takaful Insurance, Insurance Authority Board of Directors' Decision No. (25) of 2014 Pertinent to Financial Regulations for Insurance Companies, Insurance Authority Board of Directors' Decision No. (26) of 2014 Pertinent to Financial Regulations for Takaful Insurance Companies, and the Central Bank of the UAE's Board of Directors' Resolution published in the Official Gazette issue No. (740) on 30 November 2022 Regulation Regarding Takaful Insurance. Additional requirements may be imposed pursuant to decisions to be issued by the Central Bank in this regard.