Middle East News - UAE: DFSA proposes changes to insurance regulatory regime
Source: Middle East Insurance Review | Jan 2016
The Dubai Financial Services Authority (DFSA) has issued a consultation paper proposing changes to the current regime for regulating insurance.
The DFSA said it had not substantially reviewed the insurance regime since 2003, and that since then the insurance industry in the centre had grown significantly.
The paper sets out DFSA’s proposals to align its regime with developments in the insurance sector, while also ensuring that the regime operates as intended and caters to the needs of the DIFC.
The proposals set out in the paper are designed to provide greater clarity and flexibility to those undertaking insurance activities in the DIFC, whilst also providing a regulatory framework which is proportionate to the risks associated with their activities, said DFSA.
The regulator proposes, among other things, to specify what activities can be undertaken by different types of insurance intermediaries; make clearer where regulation is not required through clear exclusions; refine the conduct of business requirements applicable to insurers, insurance intermediaries and insurance managers to make the regime more risk-based; and remain compliant with the Insurance Core Principles.
The paper contains 52 questions covering issues such as allowing both insurers and insurance intermediaries to give advice provided they have appropriate skills, competencies and resources to do so; and expanding the definition of insurance intermediation to cover operators of aggregation sites, as well as definitions of insurance agents and insurance brokers. The paper also seeks views on how long a transitional period would be needed for changes to be effected and anticipated transitional difficulties.
The deadline for the industry to provide feedback is 11 February 2016.
DFSA added that it had not undertaken a comprehensive review of the regime applicable to intermediation (such as giving advice) relating to long-term insurance. While the current consultation exercise addresses some peripheral issues relating to long-term insurance insofar as they closely relate to insurance intermediation, the regulator expects to deal with any remaining issues in the area under a separate project in due course.