A new regulation issued by the Central Bank of the UAE for the insurance brokers will come into effect next year. According to this regulation, insurance brokers in the UAE cannot combine their role with any other insurance-related profession, nor can they become partners or agents of any other broker.
The new rule also restricts the insurance companies from contacting directly or indirectly with the policy holders that are clients of the insurance brokers, whether at inception or renewal, in order to deprive these brokers of the remuneration.
The law makes it compulsory for the insurance firms to pay the agreed remuneration to the broker within the deadline specified in the applicable Insurance Broking Agreement, which must not exceed 10 business days from receipt by the insurance companies of premium payments. In case the premium is paid in instalments, the remuneration must be paid within instalments, subject to the same time frame.
The regulations, which will come into effect on February 15, 2025, will apply to onshore UAE-regulated entities, including all insurance brokers, all insurance companies, foreign branches of insurance companies licensed to underwrite primary insurance and reinsurance (including Takaful), and reinsurers.
However, insurance brokers in financial-free zones are exempt due to their separate regulatory regime.
