UAE insurance firms get one year to regularise positions

The Cabinet has issued a resolution granting insurance companies operating in the UAE, in the combined business of insurance of persons and fund accumulation operations along with property and liability insurance, a period of one year, starting from 28th of August 2015, to regularise their positions in accordance with the provisions of Article No. 25 of Federal Law No. 06 of 2007 concerning the Establishment of the Insurance Authority and Regulation of Insurance Business.

The provisions of Article 25 of Federal Law No. 06 of 2007 concerning the Establishment of the Insurance Authority and Regulation of Insurance Business, stipulate that it is not permissible to combine insurance of persons and fund accumulation operations and property and liability insurance operations.

Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of the Insurance Authority, said in a press statement that the decision to grant the insurance companies an additional period of one year to regularise their positions came as part of the UAE leadership's approach to support national companies and improve their performance in order to serve economic development in the UAE.

He added that the decision stems from the government's endeavour to provide a greater opportunity for the companies to regularise their positions in order to strengthen the competitive environment in the UAE markets and facilitate the application of legal procedures that serve economic development in the UAE and contribute to the development of the insurance sector’s performance to more advanced levels.

The minister reiterated the government's keenness to enhance the performance of the insurance sector and development of its business in line with the qualitative developments experienced in all sectors of the national economy.

He highlighted the importance of the role played by the insurance sector in the economic and financial system in the UAE and in the development of the society and the provision of economic protection for individuals at all levels and activities.

He explained that the extension decision gives an appropriate new opportunity for insurance companies engaged in the insurance of persons and property to properly regularise their positions, which serves corporate strategy and reflects positively on the achievements of the national economy.

He stressed that the decision to extend the period following many other previous opportunities opens the door wider for companies to rectify their positions as stipulated by the Insurance Authority establishing law in an appropriate manner and without affecting their performance.

The minister pointed out the importance of persons’ insurance, fund accumulation operations, property and liability insurance for the business of insurance companies, as well as the written premiums therein, and the insurance sector’s activity in the UAE in general.

Al Mansouri explained that the development of economic, urban and social activity in the UAE has reflected on the insurance sector, as earned premiums have risen in property and liability insurance classes to Dh24.9 billion in 2014, a growth of 10.6 per cent over 2013, while the total written premiums in insurance of persons and fund accumulation operations amounted to Dh8.6 billion in 2014.

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