The UAE Life Insurance Regulations delayed by 6 months
The Insurance Authority issued the Board of Directors’ Decision No. (49) of 2019 Concerning Instructions for Life Insurance and Family Takaful Insurance (“Life Regulations”) in October 2019 with an implementation date 6 months from the date of gazette of the Life Regulations, which were due to come into force effective 16 April 2020.
The Insurance Authority Board of Directors’ Resolution No (15) of 2020 dated 30 March 2020, On the Amendment to Certain Provisions of the Board Resolution No 49 of 2019 On the Instructions as to Life Insurance and Family Takaful Insurance has delayed implementation of the Life Regulations by 6 months, which means the Life Regulations will be effective from 16 October 2020.
It is noteworthy that the Life Regulations were issued late last year after 2 years of consultation on the draft. While the majority of the Insurance sector hailed this as a welcome move, due to the drastic measures announced by the Life Regulations, such as caps on commissions and indemnity commissions, the insurance intermediaries felt that the Life Regulations would be counterproductive to the growth of the life insurance market in the UAE.
The Life Regulations bring in a mandatory free-look period of 30 days, enhanced disclosures to customers and complete transparency in terms of other charges and fees and would greatly cut down on mis-selling of life insurance products. However, given the unprecedented times we are living in, where insurance companies are faced by large and uncertain claims exposure, under health, travel and especially life insurance, the extension by the UAE Insurance Authority is a step in the right direction, as it will give insurance companies time to focus on dealing with other immediate concerns.
Authored by Senior Associate, Anand Singh