UAE: New insurance brokerage regulation will take effect on 15 Feb 2025
Source: Middle East Insurance Review | Nov 2024
The Central Bank of the UAE has issued its new ‘Insurance Brokerage Regulation 2024’ that will take effect on 15 February 2025. This includes several new provisions to improve governance in areas like claims settlements, brokers’ remuneration and the collection of premiums.
The new regulation replaces Insurance Brokerage Regulation 2013.
Under the new rules, insurance brokers will be prohibited from collecting claims settlements which will now be paid directly by the insurance companies to the policyholders. This prohibition only applies to primary (direct) insurance operations. Reinsurance operations will be exempt from this rule and remain subject to the standard terms of any reinsurance brokerage agreement.
Insurance companies will be required to pay remuneration to insurance brokers directly rather than the latter deducting this from premium. Insurance companies may not communicate directly or indirectly with policyholders who are clients of the insurance broker (whether at inception or renewal) to deprive insurance brokers of remuneration.
Insurance companies must pay the agreed remuneration to the insurance broker within the deadline specified in the applicable insurance brokerage agreement and this must be within 10 business days of receipt by the insurance companies, of premium payments.
The regulation said that premium collection will be the sole responsibility of insurance companies, not insurance brokers. It will also prohibit insurance brokers from collecting insurance premiums from clients under any circumstance.
Likewise, insurance brokers will be prohibited from collecting premium refunds, which must be paid directly to policyholders by insurance companies. M