Regulation No….of 2012 on Registration of the Insurance Brokers and Organization of their Operations
The Minister of Economy, Chairman of the Insurance Authority’s Board of Directors
Having considered the Federal Law No.1 of 1972 on the Ministries' responsibilities and the Ministers' authorities and the amending laws,
The Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations,
The Executive Regulation of the Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations,
The Ministerial Decree No. 543 of 2006 on Organization of Practicing the insurance brokerage profession,
And on basis of the Insurance Authority Director General’s presentation, and the Insurance Authority Board of Directors’ approval,
Resolved as follows:
Article (1)
Terms & Definitions
1. The Regulation herein shall be called “Regulation on Registration of the Insurance Brokers and Organization of their Operations” and hereafter referred to as ’Regulation’.
2. The following words and expressions shall bear the meanings beside each of them unless the context provides otherwise:
State:
The United Arab Emirates
Law:
The Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations.
Executive Regulation:
The Executive Regulation of the Law issued by Decision of the Insurance Authority’s Board of Directors.
Authority:
The Insurance Authority established by virtue of the provisions of the Law.
Board:
The Insurance Authority's Board of Directors
Chairman:
The Chairman of the Board
Director General:
The Director General of the Insurance Authority
Company:
Any insurance company ( ortakaful insurance company) incorporated in the State and foreign insurance company (or foreign takaful insurance company) licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.
Insurance Broker:
The person who independently intermediates in insurance operations between the applicant of the insurance and the insurance company in return for a commission from the insuring company
Client:
The applicant of the insurance or the insured
Insurance brokerage
operations
They include brokering in operations of insurance of persons, fund accumulation operations and property and liability insurance ( and the similar takaul insurance operations)
Register:
The register of the insurance brokers maintained by the Insurance Authority.
Article (2)
Scope of applicability
1. The provisions of the Regulation herein shall apply to all insurance brokers operating in the State or to all those intending to work inside the State to practice the insurance brokerage profession.
2. It is impermissible to practice the insurance brokerage profession only upon registering in the register according to the provisions of the regulation herein.
3. It is impermissible for a company to accept insurance operations of risks existing inside the State through an insurance broker unregistered in the register.
Article (3)
Key Rules of Registration
1. Registration shall be affected according to the insurance classes and types stated in the Law and the Executive Regulation.
2. A broker may cumulate operations of brokerage in insurance of persons and fund accumulation operations on one side and brokerage in insurance of property and liabilities on the other side provided thatcomplete separation between thembe maintained whether as to records, books, or the individuals working in each class of insurance. Thebroker, as well, may take up specialization in certain class of insurance or in one type of insurance or more.
3. The broker shall not cumulate the broker’srole as an insurance broker for one side and as an insurance agent, consultant, adjuster or an actuary on the other side. In case the broker is licensed to carry out re-insurance,the broker shall not cumulate the two roles as to the same operation for the same entity the broker is working for its account.
4. Registration in the register shall not be subject to sale or assignment to any other person or entity.
5. A broker shall conclude within three months as from date of registration two brokerage agreements in insurance operations with at least two insurance companies operating in the State.
Article (4)
Registration Requisites
An applicant for registration in the insurance brokers’ register shall meet the following requisites:
1. A local broker:
a. Shall be a limited liability company or a private stock company.
b. UAE nationals’ stake in the company shall not be less than 51%.
c. One partner at least obtained a university degree in one of the following domains: insurance, management, law, accounting, commerce, finance, economy or acquired AC11 of London or similar institutes and that all partners fulfilled the provisions of Article (30) of the Law.
d. The company’s capital shall not be less than AED five million; fully paid-up.
e. All the partners, the board members and the manager shall be of legal capacity, good practice and never been declared bankrupt.
f. The company shall appoint a manager in charge fulfilling paragraph 1/3 of Article (4) herein and having at least the minimum of the required specializations stated in paragraph 2/3 of Article (4) herein.
2. A foreign broker:
a. Shall be a company incorporated outside the State and licensed in its country of registration to practice the insurance brokerage profession in the classes and types of insurance the broker is intending to practice in the State.
b. Shall carry out its operation in the State by way of opening a branch of a foreign company.
c. The company’s paid-up capital in its country of registration shall not be less than AED ten million.
d. Shall appoint a local national representative.
e. The company shall satisfy clauses E&F of paragraph 1 of Article (4) herein.
3. Requisites to be met by the manager in charge and the employees of both the local and foreign brokers.
1. A manager in charge:
a. Obtained a university degree in one of the specializationsrelated to insurance operations or acquired ACII at least of London or of a similar professional institution.
b. Of legal capacity.
c. Shall work full time as manager in charge.
d. Successfully passed three training sessions in insurance or insurance brokerage.
e. Having practical experience in the fields of insurance or insurance brokeragefor a period no less than five years if the broker is a UAE national and ten years if the broker is a non UAE national.
f. Passed the examinations conducted by the examination boardset to test the employees of insurance and the professions related to insurance formed by the Insurance Authority.
g. Of good conduct and behavior, never been convicted for breach of honor or being declared bankrupt unless rehabilitated.
h. Never been dismissed from any insurance company or any other company for disciplinary reasons.
i. Not liable according to the Insurance Authority own discretion for grief violations of any of the provisions of the Law or the companies’ Law in his capacity as general manager or a member of the board of a company including liability of causing compulsory liquidation of the company.
j. Any other requisites deemed suitable by the Insurance Authority issued by decision of the Director General.
2. The specialized employees of the broker:
The broker shall appoint at least two specialists in insurance of persons and fund accumulation operations and at least two specialists in general insurance (depending upon the broker’s specialization). They shall meet the following requisites:
a. Obtained preparatory school certificate at least.
b. Met the requisites stated at paragraphs b, c, d, e, f, g, h, I, j, k.
c. Having practical experience (depending upon the specialization) in the field of insurance or insurance brokerage for three years at least if the broker is a UAE national and five years at least if the broker is not UAE national.
Article (5)
Registration Documents
1. A local company intending to register in the register shall submit the following documents:
a. True copy of its article and memorandum of association and its registration in the trade register.
b. True copy of UAE nationals’ registration card or passport.
c. List of the partners’ names, each one of them shares and documents establishing their legal capacity, nationalities and previous experience.
d. Statement of the types of insurance operations the company is intending to practice therein brokerage activities.
e. An undertaking that the manager in charge is a full time manager to carry out insurance brokerage operations.
f. The required professional liability insurance policy and bank guarantee.
g. True copy of the bank agreement concluded by the broker and one of the banks operating in the State therewith the broker opened an account especially for insurance brokerage operations.
h. Any other documents required by the Insurance Authority needed to register the broker.
2. A foreign company intending to open a branch to practice insurance brokerage in the State shall submit the following documents:
a. An official certificate from the concerned authority in its country of registration affirming that the company is incorporated and registered in that country and is licensed to practice the insurance brokerage profession in the types and classes of insurance it intending to carry out in the State.
b. Practiced insurance brokerage professions in its country for no less than five years.
c. List of the partners’ names and their nationalities.
d. Copy of two of the most recent statements of accounts approved and authenticated by the concerned authorities of the country of the company.
e. True copy of the company’s board of director’s resolution to open a branch in the State.
f. The documents stated in d, e, f, g, h of paragraph 1 of Article (5) herein.
Article (6)
Registration Procedures
1. The Insurance Authority upon submission of the application shall:
a. Register the application in the relevant record and endorse it with a number and date of submission.
b. Hand the applicant a receipt containing name of the applicant of registration, the subject matter, the registration number, its date and list of the attached documents.
2. Should the Insurance Authority find the registration applicationnot meeting any of the requisites, the required particulars or documents, the applicant shall be advised by a registered letter or direct delivery to meet same within two months as from date of notice and should he fails to act as so within the stated period, the application shall be deemed cancelled by law and the applicant shall not submit any other application before lapse of three months as from date of such cancellationof the application.
3. The application shall be considered and evaluated within (30) days at most as from date of submission and thereafter such application shall be referred to the Director General coupled withthe opinion of the pertinent department of the Insurance Authority.
4. The Director General may accept or reject the registration application in light of what he sees suitable to the market needs and necessities of the public interest.
5. In case of accepting the application, the applicant shall be advised as so and requested to submit the documents of the financial guarantees within fifteen days as from date of advice.
6. Following accomplishment of the documents submission procedures, the broker shall be registered in the register and given registration certificate of an insurance broker according to the particulars and information stated in the register.
7. Duration of the broker’s registration shall be one year subject to annual renewal.
8. The broker shall be committed to carry out his operations within sixmonths as from date of registration.
9. Should the registration beingdone on basis of incorrectdocuments and information and same not corrected within a period determined by the Director General, the registration shall be cancelled by decision of the Director General.
Article (7)
Registration Rejection and Appeals
1. In case the registration application is rejected, the applicant shall be advised as so.
2. The applicant of the registration may appeal before the Board the decision of the Director General rejecting the registration. The appeal shall be referred to the Board along with the Director General’s opinion.
3. The Board may accept or reject the appeal in light of what seen suitable for the market needs and necessities of the public interest. However, the Board shall not be obliged to give justification for or reasons of its decision in any case.
4. In case the Board upholds the decision of the Director General rejecting the registration application, the applicant shall have the right to file a new application only after expiry of one calendar year at least as from date of advising the applicant of the rejection decision.
5. The Board’s decision rejecting the application shall be final.
Article (8)
The Broker’s Financial Guarantees
1. The insurance broker shall be obliged to submit the following financial guarantees and make the following procedures:
a. A professional liability policy of AED three million by the local insurance broker and five million by the foreign insurance broker per eventas guarantee of the civil liability emerging from damages incurred due to the broker’spracticing of his profession. The policy shall be issued in the broker’s name in favor of the Chairman of the Board in so capacity.
b. One year bank guarantee automatically renewable throughout the period of registration and of continual duration beyond the date of completing the registration until a decision is made by the Insurance Authority cancelling the bank guarantee and advising the bank as so by a letter issued by the Insurance Authority.
Amount of Guarantees:
For a local Broker:
AED 2 million
for the broker’s main office
AED 1 million
for each of the broker’s branches
For a foreign broker:
AED 3 million
for the broker’s main office in the State
AED 2 million
for each additional branch in the State.
2. The broker shall be obliged to open a separate account with one of the banks operating in the State to be assigned for the financial transactions relevant to the insurance broker’s operations only.
Article (9)
Renewal of Registration
The broker, for purposes of renewing the registration, shall submit the following:
a. An application to the Insurance Authority beforeone monthat least as from the expiry date of registration to be submitted in two copies signed by the brokers or by whoever legally represents the broker.
b. Statement of the operations carried out by the broker during the last year.
c. Copy of the brokerage agreement concluded by the broker with the insurance companies.
d. List of the partners’ names, the name of the manager in charge or the manager in charge of the administration as the case might be and of all the senior officials in charge of the brokerage operations.
Article (10)
Changing Particulars and Information
1. The insurance broker shall advise the Insurance Authority of any change may develop in any of the particulars, information or documents on their basis the broker’s registration has been accomplished within fifteen days as from date of occurrence.
2. In case the post of the manager in charge became vacant, the broker shall advise the Insurance Authority and appoint another in his place within one month as from date of the post becoming vacant and notify the Insurance Authority of the new manager’s name and qualifications. However, the new manager in charge shall meet the destined requisites.
Article (11)
Opening Insurance Brokerage Branch in the State
1. The insurance broker may file an application to open a branch or branches inside the State should the brokermeets the following requisites:
a. Two years at least have already passed as from date of registration during which the broker actually practiced the profession and that no disciplinary penalty has been imposed on the broker.
b. Obtainedthe approval of the pertinent authority of the concerned Emirate.
c. The amount of premiums attained by the broker in the last fiscal year shall not be less than AED one million.
d. The new branch shall operate under the direct supervision of the manager in charge of the broker’s main office and that the person in charge of the branch shallmeet the requisites destined for the manager in charge of a brokerage company.
2. The insurance broker shall file an application to the Insurance Authority on the form prepared for the purpose along with the required documents.
3. The Director General shall make a decision either accepting or rejecting the application. However, his decision rejecting the application shall be final.
Article (12)
The Broker’s Duties
The insurance broker whilepracticing his profession shall do the following:
a. Adherein carrying out the insurance brokerage operations to the types and classes of insurance stated in the broker’s registration.
b. Insert the broker’s name and registration number with the Insurance Authority into all the papers, corresponds and documents.
c. Not to rely at any time on one insurance company in the broker’s activity in the State.
d. Respond to the queries of the applicant or the insured in the professional way expected to be of an insurance broker.
e. Forth comply with rules of fairness and transparency in practicing the profession with the clients, insurance companies and others.
Article (13)
Rules Governing the Relation between the Insurance Company and the Insurance Broker
The relation between the insurance company and the insurance broker shall be subject to the following rules:
First: Existence of an agreement signed by the two parties:
1. An insurance company shall not accept insurance operation by an insurance broker and the insurance broker shall not offer insurance operations to an insurance company unless there is a written agreement signed by the two parties.
2. The parties (the insurance company and the broker) shall be obliged to submit a copy of the agreement with the Insurance Authority as well as any amendments thereto and the parties’ agreement to terminate it and also the decision of one of the parties to terminate it according to the terms and conditions of the agreement.
3. The agreement shall not be exclusive or prohibiting the broker to deal with other insurance companies (all other insurance companies or certain insurance companies)
4. The agreement concluded by the two parties shall contain at least the following:
a. The period of agreement
b. The insurance classes the subject matter of the brokerage activity
c. The geographic territory
d. Authorizing the broker to collect the premiums in favor of the insurance company of the operations where authorization is permitted.
e. How to pay balances from one party to another in the operations where authorization is permitted.
f. The broker entitlementof the commission as soon as the insurance policy is issued as a result of the brokerintermediating between the parties. The commission will be paid according to the terms and conditions regulating the financial relation between the two parties.
5. The agreement shall not contain an authorization to the broker to affect the following tasks:
a. Issuance of the insurance policy, its endorsements or insertion of amendments thereto except issuance of motor vehicle certificates should the parties wish so.
b. Receipt of the indemnities due to the insured or the other beneficiaries in order to pay the stakeholders.
c. The right to reject claims.
Secondly: the insurance companies’ duty in dealing with the broker:
1. In case the insurance company received a request from the broker to offerconditions and rates of certain insurance operations, the insurance company shall have no right to contact the related client directly unless the client required so by written request confirming his intention to deal directly with the company.
2. In case another broker authorized by the same client in respect of same insurance operation contacted the insurance company, the insurance company shall have no right to offerconditions or rates other than the ones offered earlier to the broker unless the later broker presented new information that would influence the companies’ decision on the conditions and rates.
3. In case the broker is not authorized by the client to renew the policy with the same issuing company, the company shall send a notice to the client to declare his intention to renew it and hand the broker a copy of same.
Article (14)
Rules Governing the Relation between the Broker and the Client
The relation between the broker and the client shall be subject to the following rules:
First: Authorization:
1. Existence of a written signed power of attorneyby the insurance applicant authorizing the broker to carry out brokerage in the insurance operation.
2. The insurance broker shall prepare text(s) of the power of attorneyto be presented to the client to sign it and send a copy thereof to the Insurance Authority before putting same into effect. The Insurance Authority shall give its opinion on the conditions it contains and the broker shall adjust them according to the Insurance Authority’s comments.
3. The following rules shall be included in particular in the power of attorney:
a. That the client authorized the broker to contact one or several insurance companies designated by the client or that he let the broker contact any insurance company approved by the Insurance Authority.
b. That the broker is committed or not committed to make procedures to claim the indemnity due to the client when informed of the insured event by the client. However, no reference shall be given in the power of attorney that the broker is authorized to receive the indemnitydue to the client.
c. That the broker is authorized to renew the policy with the same company or solicit new offers from other companies or otherwise is principally not authorized to renew the policy.
d. That the client has the right to dismiss the broker and withdrawthe so givenauthorization at any time and the broker shall have no right to impose any terms that would limit the client’s own discretion in this respect or put any burden on the client as a result of withdrawing the authorization.
Second: the broker’s duties towards the client:
1. The broker shall deal with the client according to the principlesof good faith and transparency and give the client suitable technical advice.
2. The broker shall protect the client’s interests whether in comparing the conditions and rates obtained for the client’s account or inpreference to deal with certain insurance company other than the others.
3. The broker shall solicit conditions and rates to the client’s own account from more than two companies.
4. The broker shall explain to the client in readily comprehended form, importance of disclosing the relevant material facts to the insurance company upon requesting the insurance as the client should faithfully and precisely disclose all material circumstances relevant to the subject matter of the insurance that would influence the insurance companies’ decision to agree to conclude a contract or not, to determine the conditions and rates. He shall explain to the client the risk of non-complying as so.
5. The broker shall inform the client ina sufficient time as from the expiry date of the insurance policy whether he intends to renew the policy through the broker (unless authorized to renew policies according to the power of attorney) or to renew it with the same company according to the earlierconditions or intends to solicit other offers.
6. The broker shall explain to the client whetheris being authorized or not authorized to receive the premium on behalf of the insurance company intending to deal with according to the provisions of Article (15) of the Regulation herein and shall indicate importance of paying the premiums on the dates destined by the company and the negative consequences might affect him as a result of not paying on time.
7. Should the broker be authorized by the client to follow up the claimprocedures of theindemnitiesdue to the client, the broker shall specify to the client the legal procedures should be adopted and the documents be submitted and make the client aware of the company requisites such as further explanations or other documents. The broker as well shall convey to the client the insurance companies’ decision on the so presented claim.
The broker shall not act on behalf of the client vis-a-vis the insurance company of any commitment to accept or reject the companies’ decision as such decision shall be made by the client.
Article (15)
The Financial Relation of the Insurance Company, the Broker and the Client
1. The financial relation between the insurance company and the client shall be direct relation. Accordingly, the client shall pay the insurance premium and any other amounts due from the client to the insurance company directly and not to the broker. Further, the broker shall have no right to receive the insurance premium or any other amounts due from the client.
In case the client paid the broker irrespective of the provisions herein, the client’s liability towards the insurance company shall not be discharged.
2. The provisions of paragraph (1) above shall not apply to operations of the compulsory insurance of the civil liability emerging from motor vehicle accidents (individual) as the broker is obliged to collect the premiums and pay them to the insurance company monthly within the next seven days following the month of issuing the policy.
3. The insurance company shall be obliged to pay the commission of the broker within seven days as from date of receiving the insurance premium.
4. The insurance company shall not pay the indemnities,due tothe client or the beneficiary, to the broker in order to pay them. In case this happens, the insurance companies’ liability towards the client or the beneficiary shall not be discharged unless they actually received the indemnity.
The Minister of Economy, Chairman of the Insurance Authority’s Board of Directors
Having considered the Federal Law No.1 of 1972 on the Ministries' responsibilities and the Ministers' authorities and the amending laws,
The Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations,
The Executive Regulation of the Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations,
The Ministerial Decree No. 543 of 2006 on Organization of Practicing the insurance brokerage profession,
And on basis of the Insurance Authority Director General’s presentation, and the Insurance Authority Board of Directors’ approval,
Resolved as follows:
Article (1)
Terms & Definitions
1. The Regulation herein shall be called “Regulation on Registration of the Insurance Brokers and Organization of their Operations” and hereafter referred to as ’Regulation’.
2. The following words and expressions shall bear the meanings beside each of them unless the context provides otherwise:
State:
The United Arab Emirates
Law:
The Federal Law No.6 of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations.
Executive Regulation:
The Executive Regulation of the Law issued by Decision of the Insurance Authority’s Board of Directors.
Authority:
The Insurance Authority established by virtue of the provisions of the Law.
Board:
The Insurance Authority's Board of Directors
Chairman:
The Chairman of the Board
Director General:
The Director General of the Insurance Authority
Company:
Any insurance company ( ortakaful insurance company) incorporated in the State and foreign insurance company (or foreign takaful insurance company) licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.
Insurance Broker:
The person who independently intermediates in insurance operations between the applicant of the insurance and the insurance company in return for a commission from the insuring company
Client:
The applicant of the insurance or the insured
Insurance brokerage
operations
They include brokering in operations of insurance of persons, fund accumulation operations and property and liability insurance ( and the similar takaul insurance operations)
Register:
The register of the insurance brokers maintained by the Insurance Authority.
Article (2)
Scope of applicability
1. The provisions of the Regulation herein shall apply to all insurance brokers operating in the State or to all those intending to work inside the State to practice the insurance brokerage profession.
2. It is impermissible to practice the insurance brokerage profession only upon registering in the register according to the provisions of the regulation herein.
3. It is impermissible for a company to accept insurance operations of risks existing inside the State through an insurance broker unregistered in the register.
Article (3)
Key Rules of Registration
1. Registration shall be affected according to the insurance classes and types stated in the Law and the Executive Regulation.
2. A broker may cumulate operations of brokerage in insurance of persons and fund accumulation operations on one side and brokerage in insurance of property and liabilities on the other side provided thatcomplete separation between thembe maintained whether as to records, books, or the individuals working in each class of insurance. Thebroker, as well, may take up specialization in certain class of insurance or in one type of insurance or more.
3. The broker shall not cumulate the broker’srole as an insurance broker for one side and as an insurance agent, consultant, adjuster or an actuary on the other side. In case the broker is licensed to carry out re-insurance,the broker shall not cumulate the two roles as to the same operation for the same entity the broker is working for its account.
4. Registration in the register shall not be subject to sale or assignment to any other person or entity.
5. A broker shall conclude within three months as from date of registration two brokerage agreements in insurance operations with at least two insurance companies operating in the State.
Article (4)
Registration Requisites
An applicant for registration in the insurance brokers’ register shall meet the following requisites:
1. A local broker:
a. Shall be a limited liability company or a private stock company.
b. UAE nationals’ stake in the company shall not be less than 51%.
c. One partner at least obtained a university degree in one of the following domains: insurance, management, law, accounting, commerce, finance, economy or acquired AC11 of London or similar institutes and that all partners fulfilled the provisions of Article (30) of the Law.
d. The company’s capital shall not be less than AED five million; fully paid-up.
e. All the partners, the board members and the manager shall be of legal capacity, good practice and never been declared bankrupt.
f. The company shall appoint a manager in charge fulfilling paragraph 1/3 of Article (4) herein and having at least the minimum of the required specializations stated in paragraph 2/3 of Article (4) herein.
2. A foreign broker:
a. Shall be a company incorporated outside the State and licensed in its country of registration to practice the insurance brokerage profession in the classes and types of insurance the broker is intending to practice in the State.
b. Shall carry out its operation in the State by way of opening a branch of a foreign company.
c. The company’s paid-up capital in its country of registration shall not be less than AED ten million.
d. Shall appoint a local national representative.
e. The company shall satisfy clauses E&F of paragraph 1 of Article (4) herein.
3. Requisites to be met by the manager in charge and the employees of both the local and foreign brokers.
1. A manager in charge:
a. Obtained a university degree in one of the specializationsrelated to insurance operations or acquired ACII at least of London or of a similar professional institution.
b. Of legal capacity.
c. Shall work full time as manager in charge.
d. Successfully passed three training sessions in insurance or insurance brokerage.
e. Having practical experience in the fields of insurance or insurance brokeragefor a period no less than five years if the broker is a UAE national and ten years if the broker is a non UAE national.
f. Passed the examinations conducted by the examination boardset to test the employees of insurance and the professions related to insurance formed by the Insurance Authority.
g. Of good conduct and behavior, never been convicted for breach of honor or being declared bankrupt unless rehabilitated.
h. Never been dismissed from any insurance company or any other company for disciplinary reasons.
i. Not liable according to the Insurance Authority own discretion for grief violations of any of the provisions of the Law or the companies’ Law in his capacity as general manager or a member of the board of a company including liability of causing compulsory liquidation of the company.
j. Any other requisites deemed suitable by the Insurance Authority issued by decision of the Director General.
2. The specialized employees of the broker:
The broker shall appoint at least two specialists in insurance of persons and fund accumulation operations and at least two specialists in general insurance (depending upon the broker’s specialization). They shall meet the following requisites:
a. Obtained preparatory school certificate at least.
b. Met the requisites stated at paragraphs b, c, d, e, f, g, h, I, j, k.
c. Having practical experience (depending upon the specialization) in the field of insurance or insurance brokerage for three years at least if the broker is a UAE national and five years at least if the broker is not UAE national.
Article (5)
Registration Documents
1. A local company intending to register in the register shall submit the following documents:
a. True copy of its article and memorandum of association and its registration in the trade register.
b. True copy of UAE nationals’ registration card or passport.
c. List of the partners’ names, each one of them shares and documents establishing their legal capacity, nationalities and previous experience.
d. Statement of the types of insurance operations the company is intending to practice therein brokerage activities.
e. An undertaking that the manager in charge is a full time manager to carry out insurance brokerage operations.
f. The required professional liability insurance policy and bank guarantee.
g. True copy of the bank agreement concluded by the broker and one of the banks operating in the State therewith the broker opened an account especially for insurance brokerage operations.
h. Any other documents required by the Insurance Authority needed to register the broker.
2. A foreign company intending to open a branch to practice insurance brokerage in the State shall submit the following documents:
a. An official certificate from the concerned authority in its country of registration affirming that the company is incorporated and registered in that country and is licensed to practice the insurance brokerage profession in the types and classes of insurance it intending to carry out in the State.
b. Practiced insurance brokerage professions in its country for no less than five years.
c. List of the partners’ names and their nationalities.
d. Copy of two of the most recent statements of accounts approved and authenticated by the concerned authorities of the country of the company.
e. True copy of the company’s board of director’s resolution to open a branch in the State.
f. The documents stated in d, e, f, g, h of paragraph 1 of Article (5) herein.
Article (6)
Registration Procedures
1. The Insurance Authority upon submission of the application shall:
a. Register the application in the relevant record and endorse it with a number and date of submission.
b. Hand the applicant a receipt containing name of the applicant of registration, the subject matter, the registration number, its date and list of the attached documents.
2. Should the Insurance Authority find the registration applicationnot meeting any of the requisites, the required particulars or documents, the applicant shall be advised by a registered letter or direct delivery to meet same within two months as from date of notice and should he fails to act as so within the stated period, the application shall be deemed cancelled by law and the applicant shall not submit any other application before lapse of three months as from date of such cancellationof the application.
3. The application shall be considered and evaluated within (30) days at most as from date of submission and thereafter such application shall be referred to the Director General coupled withthe opinion of the pertinent department of the Insurance Authority.
4. The Director General may accept or reject the registration application in light of what he sees suitable to the market needs and necessities of the public interest.
5. In case of accepting the application, the applicant shall be advised as so and requested to submit the documents of the financial guarantees within fifteen days as from date of advice.
6. Following accomplishment of the documents submission procedures, the broker shall be registered in the register and given registration certificate of an insurance broker according to the particulars and information stated in the register.
7. Duration of the broker’s registration shall be one year subject to annual renewal.
8. The broker shall be committed to carry out his operations within sixmonths as from date of registration.
9. Should the registration beingdone on basis of incorrectdocuments and information and same not corrected within a period determined by the Director General, the registration shall be cancelled by decision of the Director General.
Article (7)
Registration Rejection and Appeals
1. In case the registration application is rejected, the applicant shall be advised as so.
2. The applicant of the registration may appeal before the Board the decision of the Director General rejecting the registration. The appeal shall be referred to the Board along with the Director General’s opinion.
3. The Board may accept or reject the appeal in light of what seen suitable for the market needs and necessities of the public interest. However, the Board shall not be obliged to give justification for or reasons of its decision in any case.
4. In case the Board upholds the decision of the Director General rejecting the registration application, the applicant shall have the right to file a new application only after expiry of one calendar year at least as from date of advising the applicant of the rejection decision.
5. The Board’s decision rejecting the application shall be final.
Article (8)
The Broker’s Financial Guarantees
1. The insurance broker shall be obliged to submit the following financial guarantees and make the following procedures:
a. A professional liability policy of AED three million by the local insurance broker and five million by the foreign insurance broker per eventas guarantee of the civil liability emerging from damages incurred due to the broker’spracticing of his profession. The policy shall be issued in the broker’s name in favor of the Chairman of the Board in so capacity.
b. One year bank guarantee automatically renewable throughout the period of registration and of continual duration beyond the date of completing the registration until a decision is made by the Insurance Authority cancelling the bank guarantee and advising the bank as so by a letter issued by the Insurance Authority.
Amount of Guarantees:
For a local Broker:
AED 2 million
for the broker’s main office
AED 1 million
for each of the broker’s branches
For a foreign broker:
AED 3 million
for the broker’s main office in the State
AED 2 million
for each additional branch in the State.
2. The broker shall be obliged to open a separate account with one of the banks operating in the State to be assigned for the financial transactions relevant to the insurance broker’s operations only.
Article (9)
Renewal of Registration
The broker, for purposes of renewing the registration, shall submit the following:
a. An application to the Insurance Authority beforeone monthat least as from the expiry date of registration to be submitted in two copies signed by the brokers or by whoever legally represents the broker.
b. Statement of the operations carried out by the broker during the last year.
c. Copy of the brokerage agreement concluded by the broker with the insurance companies.
d. List of the partners’ names, the name of the manager in charge or the manager in charge of the administration as the case might be and of all the senior officials in charge of the brokerage operations.
Article (10)
Changing Particulars and Information
1. The insurance broker shall advise the Insurance Authority of any change may develop in any of the particulars, information or documents on their basis the broker’s registration has been accomplished within fifteen days as from date of occurrence.
2. In case the post of the manager in charge became vacant, the broker shall advise the Insurance Authority and appoint another in his place within one month as from date of the post becoming vacant and notify the Insurance Authority of the new manager’s name and qualifications. However, the new manager in charge shall meet the destined requisites.
Article (11)
Opening Insurance Brokerage Branch in the State
1. The insurance broker may file an application to open a branch or branches inside the State should the brokermeets the following requisites:
a. Two years at least have already passed as from date of registration during which the broker actually practiced the profession and that no disciplinary penalty has been imposed on the broker.
b. Obtainedthe approval of the pertinent authority of the concerned Emirate.
c. The amount of premiums attained by the broker in the last fiscal year shall not be less than AED one million.
d. The new branch shall operate under the direct supervision of the manager in charge of the broker’s main office and that the person in charge of the branch shallmeet the requisites destined for the manager in charge of a brokerage company.
2. The insurance broker shall file an application to the Insurance Authority on the form prepared for the purpose along with the required documents.
3. The Director General shall make a decision either accepting or rejecting the application. However, his decision rejecting the application shall be final.
Article (12)
The Broker’s Duties
The insurance broker whilepracticing his profession shall do the following:
a. Adherein carrying out the insurance brokerage operations to the types and classes of insurance stated in the broker’s registration.
b. Insert the broker’s name and registration number with the Insurance Authority into all the papers, corresponds and documents.
c. Not to rely at any time on one insurance company in the broker’s activity in the State.
d. Respond to the queries of the applicant or the insured in the professional way expected to be of an insurance broker.
e. Forth comply with rules of fairness and transparency in practicing the profession with the clients, insurance companies and others.
Article (13)
Rules Governing the Relation between the Insurance Company and the Insurance Broker
The relation between the insurance company and the insurance broker shall be subject to the following rules:
First: Existence of an agreement signed by the two parties:
1. An insurance company shall not accept insurance operation by an insurance broker and the insurance broker shall not offer insurance operations to an insurance company unless there is a written agreement signed by the two parties.
2. The parties (the insurance company and the broker) shall be obliged to submit a copy of the agreement with the Insurance Authority as well as any amendments thereto and the parties’ agreement to terminate it and also the decision of one of the parties to terminate it according to the terms and conditions of the agreement.
3. The agreement shall not be exclusive or prohibiting the broker to deal with other insurance companies (all other insurance companies or certain insurance companies)
4. The agreement concluded by the two parties shall contain at least the following:
a. The period of agreement
b. The insurance classes the subject matter of the brokerage activity
c. The geographic territory
d. Authorizing the broker to collect the premiums in favor of the insurance company of the operations where authorization is permitted.
e. How to pay balances from one party to another in the operations where authorization is permitted.
f. The broker entitlementof the commission as soon as the insurance policy is issued as a result of the brokerintermediating between the parties. The commission will be paid according to the terms and conditions regulating the financial relation between the two parties.
5. The agreement shall not contain an authorization to the broker to affect the following tasks:
a. Issuance of the insurance policy, its endorsements or insertion of amendments thereto except issuance of motor vehicle certificates should the parties wish so.
b. Receipt of the indemnities due to the insured or the other beneficiaries in order to pay the stakeholders.
c. The right to reject claims.
Secondly: the insurance companies’ duty in dealing with the broker:
1. In case the insurance company received a request from the broker to offerconditions and rates of certain insurance operations, the insurance company shall have no right to contact the related client directly unless the client required so by written request confirming his intention to deal directly with the company.
2. In case another broker authorized by the same client in respect of same insurance operation contacted the insurance company, the insurance company shall have no right to offerconditions or rates other than the ones offered earlier to the broker unless the later broker presented new information that would influence the companies’ decision on the conditions and rates.
3. In case the broker is not authorized by the client to renew the policy with the same issuing company, the company shall send a notice to the client to declare his intention to renew it and hand the broker a copy of same.
Article (14)
Rules Governing the Relation between the Broker and the Client
The relation between the broker and the client shall be subject to the following rules:
First: Authorization:
1. Existence of a written signed power of attorneyby the insurance applicant authorizing the broker to carry out brokerage in the insurance operation.
2. The insurance broker shall prepare text(s) of the power of attorneyto be presented to the client to sign it and send a copy thereof to the Insurance Authority before putting same into effect. The Insurance Authority shall give its opinion on the conditions it contains and the broker shall adjust them according to the Insurance Authority’s comments.
3. The following rules shall be included in particular in the power of attorney:
a. That the client authorized the broker to contact one or several insurance companies designated by the client or that he let the broker contact any insurance company approved by the Insurance Authority.
b. That the broker is committed or not committed to make procedures to claim the indemnity due to the client when informed of the insured event by the client. However, no reference shall be given in the power of attorney that the broker is authorized to receive the indemnitydue to the client.
c. That the broker is authorized to renew the policy with the same company or solicit new offers from other companies or otherwise is principally not authorized to renew the policy.
d. That the client has the right to dismiss the broker and withdrawthe so givenauthorization at any time and the broker shall have no right to impose any terms that would limit the client’s own discretion in this respect or put any burden on the client as a result of withdrawing the authorization.
Second: the broker’s duties towards the client:
1. The broker shall deal with the client according to the principlesof good faith and transparency and give the client suitable technical advice.
2. The broker shall protect the client’s interests whether in comparing the conditions and rates obtained for the client’s account or inpreference to deal with certain insurance company other than the others.
3. The broker shall solicit conditions and rates to the client’s own account from more than two companies.
4. The broker shall explain to the client in readily comprehended form, importance of disclosing the relevant material facts to the insurance company upon requesting the insurance as the client should faithfully and precisely disclose all material circumstances relevant to the subject matter of the insurance that would influence the insurance companies’ decision to agree to conclude a contract or not, to determine the conditions and rates. He shall explain to the client the risk of non-complying as so.
5. The broker shall inform the client ina sufficient time as from the expiry date of the insurance policy whether he intends to renew the policy through the broker (unless authorized to renew policies according to the power of attorney) or to renew it with the same company according to the earlierconditions or intends to solicit other offers.
6. The broker shall explain to the client whetheris being authorized or not authorized to receive the premium on behalf of the insurance company intending to deal with according to the provisions of Article (15) of the Regulation herein and shall indicate importance of paying the premiums on the dates destined by the company and the negative consequences might affect him as a result of not paying on time.
7. Should the broker be authorized by the client to follow up the claimprocedures of theindemnitiesdue to the client, the broker shall specify to the client the legal procedures should be adopted and the documents be submitted and make the client aware of the company requisites such as further explanations or other documents. The broker as well shall convey to the client the insurance companies’ decision on the so presented claim.
The broker shall not act on behalf of the client vis-a-vis the insurance company of any commitment to accept or reject the companies’ decision as such decision shall be made by the client.
Article (15)
The Financial Relation of the Insurance Company, the Broker and the Client
1. The financial relation between the insurance company and the client shall be direct relation. Accordingly, the client shall pay the insurance premium and any other amounts due from the client to the insurance company directly and not to the broker. Further, the broker shall have no right to receive the insurance premium or any other amounts due from the client.
In case the client paid the broker irrespective of the provisions herein, the client’s liability towards the insurance company shall not be discharged.
2. The provisions of paragraph (1) above shall not apply to operations of the compulsory insurance of the civil liability emerging from motor vehicle accidents (individual) as the broker is obliged to collect the premiums and pay them to the insurance company monthly within the next seven days following the month of issuing the policy.
3. The insurance company shall be obliged to pay the commission of the broker within seven days as from date of receiving the insurance premium.
4. The insurance company shall not pay the indemnities,due tothe client or the beneficiary, to the broker in order to pay them. In case this happens, the insurance companies’ liability towards the client or the beneficiary shall not be discharged unless they actually received the indemnity.
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