The Cabinet issued a resolution granting the insurance companies operating in the United Arab Emirates (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 28 August 2015 to regularize their positions in accordance with the provisions of Article No. 25 of the Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and Regulation of Insurance Business.
The provisions of Article 25 of the Federal Law No. (6) 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.
H.E. Engineer Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of the Insurance Authority said in a press statement on this occasion that the decision to grant the insurance companies that combine insurance of persons and fund accumulation operations and property and liability insurance operations an additional period of one year to regularize their positions in accordance with the provisions of the law establishing the Insurance Authority and regulating insurance operations came as part of the UAE leadership’s approach to support the national companies and improve their performance in order to serve the economic development in the UAE.
He added that the decision stems from the government’s endeavor to provide a greater opportunity for the companies to regularize their positions according to the prescribed criteria in order to strengthen the competitive environment in the UAE markets and facilitate the application of legal procedures that serve the 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 regularize 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 the companies to rectify their positions as stipulated by the IA 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.
His Excellency the Minister of Economy, Chairman of the IA Board of Directors explained that the development of economic, urban and social activity in the UAE has reflected on the insurance sector, as earned premiums has risen in property and liability insurance classes to 24.9 billion Dirhams in 2014 marking a growth of 10.6 percent from 2013, while the total written premiums in insurance of persons and fund accumulation operations amounted to 8.6 billion Dirhams in 2014.
The Annual Report recently issued by the Insurance Authority showed that the number of companies engaged in insurance of persons and fund accumulation operations, along with property and liability insurance amounted to 13 companies, including 11 national companies and two foreign companies, while the number of companies engaged in property and liability insurance classes only are 20) national companies and 17 foreign companies, and the number of insurance companies that engage in insurance of persons and fund accumulation operations only are 2 national companies and 8 foreign companies.
Under the first clause of Article 25 of the Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and Regulation of Insurance Business stipulates that it is not permissible to combine insurance of persons and fund accumulation operations and property and liability insurance operations. The second clause of the same article requires existing companies engaged in the two classes of insurance as provided for in clause (1) of the said Article shall regularize their positions within five years as from date of enforcing the law; however, the said period may be extended by a resolution of the Cabinet. The third clause of the same article obliges the existing companies engaging in both classes of insurance provided for in the first clause of that article, at the entry into force of the provisions of the law, to abide by the instructions issued by the IA Board of Directors concerning the regulation of each class of insurance.
Source -www.ia.gov.ae
