The UAE Insurance Authority (“IA”) has released new draft regulations regarding Insurance Brokerage and electronic procedures (the “Draft Law”) wherein the below amendments have been implemented to reflect major modifications and a new system inclusive of electronic procedures which shall be applicable to all insurance brokers licensed and registered with the IA.

Definitions

The definition of Insurance Broker in the new Draft Law has expanded to include “A juridical person who independently intermediates in insurance or reinsurance operations between the insurance proposer or reinsurance proposer on one side and any insurance or reinsurance company on the other side and receives for his efforts commission from the insurance company or the reinsurance company with which the insurance or reinsurance has been concluded.”

To implement the electronic aspect to Insurance Brokerage regulations, the below definitions have been added:

  • Price Comparison Websites: “the registered company at the Authority to provide insurance premium price comparison services, using the internet”
  • Electronic: “What is relevant to new technologies which has electric, digital, magnetic, wireless, visual, electromagnetic, computed, photic capabilities, and the likewise.”
  • Electronic Copy: “A record or document that is created, stored, generated, copied, sent, communicated or received by electronic means, on a tangible medium or any other Electronic medium and is retrievable in perceivable form.”

General Provisions

According to the new Draft Law, some major provisions may be implemented towards Insurance Brokerage prohibiting them from the following:

  • combining the brokerage business in personal insurances and funds accumulation operations on the one hand and brokerage of property and liability insurance on the other hand, with the exception of insurance brokerage licensed to practice both classes before the issuance of the new regulations, and provided that both classes of business are completely separated in terms of books and records or personnel working in each class (including sales personnel).
  • combining the role as insurance brokerage business on one hand and the role of insurance agent or actuary, surveyor and loss adjuster, insurance consultant or any insurance related profession on the other hand.

The insurance brokerage is obliged to fulfil and maintain its financial solvency requirements in accordance with the conditions specified in the Draft Law, throughout the entire period in which it is licensed, guaranteeing its continued fulfilment of obligations in accordance with the rules and regulations enforced by the IA.

Letter of Guarantee

This Draft Law has also introduced a major modification to the provisions and conditions set out previously in regards to the Letter of Guarantee (“LOG”) and the extent of its necessity. A new policy has been announced under the name Guarantee Insurance Policy (“GIP”) as an alternative and a second option to the LOG, certain conditions of which have also been amended except for the value of the LOG which still provides the below:

“[The Letter of Guarantee’s] value may not be less than (AED 3,000,000) three million Dirhams for companies incorporated in the UAE and (AED 1,000,000) one million Dirhams for any branch thereof. For the branch of a foreign company or companies incorporated in any financial free zone, its value may not be less than (AED 5,000,000) five million Dirhams for the branch and (AED 3,000,000) three million Dirhams for any addition branch thereof in the UAE.”

The professional indemnity policy remains mandatory and shall be provided in favour of the IA in accordance with the conditions and provisions referred to in the draft regulations.

Some of the amendments provided in the Draft Law concerning the LOG include:

  • the LOG shall be issued by a bank or a financial institution licensed or operational in the UAE in favour of the Chairman of the IA Board of Directors in his capacity according to the form designated by the IA; and
  • in case the LOG falls below the aforementioned value, as set out in IA Board of Directors Resolution No. (15) of 2013 and its amendments, the broker shall return the amount of the guarantee to the required limit immediately.

However according to the Draft Law, the insurance broker is permitted to submit a request to the IA to reduce the amount of the guarantee of the insurance company by one (1) million dirhams for the insurance company established in the UAE, or a branch of an insurance company established in a financial free zone, under the following conditions:

  1. The insurance broker’s commitment to submit annual audited financial statements and reports and quarterly financial statements and reports within the deadlines specified in the draft regulations; and
  2. That the net equity stated in the last audited annual financial statements submitted to the IA is not less than one hundred percent of the required minimum capital; and
  3. The absence of executive court rulings submitted to the IA against the broker making the amount of the guarantee less than the amount to be kept after reducing the one million dirhams referred to above.

Guarantee Insurance Policy

As mentioned above, the GIP has been introduced in the new Draft Law providing an alternative to the LOG, with the following conditions that shall apply to the policy:

  1. issued by a licensed and registered insurance company with the IA, and after its conditions have been approved by the IA; and
  2. issued in the name of the insurance broker in favour of the Chairman of the IA Board of Directors in his capacity; and
  3. unconditional, unrestricted, payable on demand, by the IA, at any time and may only be cancelled under a written consent of the IA; and
  4. issued for the purpose of guaranteeing the settlement of the Insurance Broker’s transactions and meeting their obligations arising from practicing Insurance Brokerage towards companies, clients or beneficiaries, or in implementation of the IA’s decisions; and
  5. valid throughout the license term and applicable to the annual renewal of the license. The Insurance Brokerage activity may not be practiced unless such policy is available and valid; and
  6. that the sum insured may not be less than (AED 3,000,000) three million Dirhams for companies incorporated in the UAE and (AED 1,000,000) one million Dirhams for any branch thereof. For the branch of a foreign company or companies incorporated in any financial free zone, its value may not be less than (AED 5,000,000) five million Dirhams for the branch and (AED 3,000,000) three million Dirhams for any addition branch thereof in the UAE; and
  7. that the sum insured is proportional to the size of the business risks carried by the broker, so that it is in no way less than 10% of the previous year’s turnover, for the company incorporated in the UAE, and 10% of the turnover by each branch that belongs to it. As for the branch of the foreign company or the branch of the company established in a financial free zone, the sum insured shall not be less than 20% of the previous year’s turnover in Emirati dirham and 20% of the previous year’s turnover for any other additional branch within the UAE; and
  8. have no deduction amount; and
  9. the IA shall have the right to liquidate the GIP submitted by the insurance broker in full or in part to ensure meeting its liabilities resulting from practicing its activity towards the companies, clients or beneficiaries, or in implementation of the IA’s decisions; and
  10. should the insured sum fall below the limit stated in this article, the broker shall return the sum to the required limit immediately and pay the resulting premium difference; and
  11. any amendment or alternation to the insurance policy may only be made under the written approval of the IA; and
  12. the IA is permitted to request an increase in the insured sum in accordance with the size of the broker’s obligations.

The new Draft Law allows insurance brokers with a valid license and registration with the IA to benefit the option of the GIP and may exchange it with the LOG, under the following conditions:

  1. provide the IA with a clearance certificate from the insurance companies that the broker works with, without any outstanding receivables; and
  2. the absence of executive court rulings submitted to the IA against the broker; and
  3. that the sum insured is proportional to the size of the business risks carried by the broker, so that it is in no way less than 10% of the previous year’s turnover, for the company incorporated in the UAE, and 10% of the turnover by each branch that belongs to it. As for the branch of the foreign company or the branch of the company established in a financial free zone, the sum insured shall not be less than 20% of the previous year’s turnover in Emirati dirham and 20% of the previous year’s turnover for any other additional branch within the UAE; and
  4. should the broker wish to keep all types and classes of insurance of which it was previously licensed for, it must provide evidence of actual and active practice during the past year.

Electronic Procedures

The implementation of the electronic procedures has also been introduced in the Draft Law making the provisions regarding insurance brokers set forth in IA Board resolution no. (18) of 2020 Concerning the Electronic Insurance Regulations and relative regulations applicable in the new Draft Law when conducting business electronically, specifically whilst utilising price comparison websites.

For the purposes of electronic linking with the insurance company, the broker is required to develop and operate its website or smart application by setting standard technical interfaces through (Web Services) to ensure the (1) electronic exchange of basic customer information with the insurance company’s technical systems, (2) enable the company to assess the insured risks and (3) provide the customer with an offer for the insurance policy, the payment mechanism, and the policy information once issued by the insurance company.

Obligations of the Insurance Broker

Additional modifications have been applied regarding the obligations of the insurance broker towards the IA, the client and the insurance companies. For example, with reference to its obligations toward the IA, it is now prohibited for the insurance broker to engage in practices that would generate commission for business inconsistent with the license granted to him. While in regards to the clients, the insurance broker is obliged to provide the client with a receipt for the sums paid in accordance with the approved regulations, provided that one of them is a text message or an email. Finally, for its obligations towards insurance companies, below are a few of the modifications that have been incorporated in the Draft Law:

  1. transfer the received premiums to the insurance company within a period of no longer than two (2) working days from the date of receipt without deducting any due amounts, interests or commissions from such premiums; and provide the Company with a detailed report thereon; and
  2. the agreement between the broker and the insurance company shall not include any condition that (1) guarantees the insurance broker any outstanding and unpaid premiums from the client or (2) direct receipt of premiums from the client (save for vehicle insurance premiums). On the other hand, the company is obliged to transfer the commissions due to the broker in accordance with the conditions stipulated in the brokerage agreement; and
  3. the broker shall not hold on to any acquired premiums and utilise them for operational or daily expenses; and
  4. the broker shall perform monthly reconciliations with the insurance company within five (5) business days of each subsequent month and keep documented and certified account statements in accordance with the accounting systems (and vice versa); and
  5. the broker shall periodically process monthly reconciliations with the insurance company provided that these reconciliations are completed within five (5) days from the end of that month. The insurance company, however, is obliged to process the periodic reconciliations every three (3) months with the insurance broker.
  6. the broker shall exchange information and details, with the insurance company, of documents and statements of accounts and document them in accordance with the enforced regulations.

The insurance company shall not, unless with the insured’s written request, attract the clients of the broker in order to deprive the broker of his commission; in the event that the insurance company has violated this clause, the broker will be entitled to the commission for that year. The insurance company is also not permitted to provide different rates to another insurance broker for the same insurance process, unless the other insurance broker has provided different information that affects the insurance company’s decision regarding the terms and prices of insurance.

Organisational Structure

With reference to the organisational structure of the insurance brokerage, certain modifications are outlined on the qualifications and expertise of the below personnel:

  1. The Director General or CEO should hold a university degree in insurance, financial sciences, law or insurance-related sciences or equivalent, or the ACII certificate accredited by the Chartered Insurance Institute of London, or a certificate accredited by a similar professional institute.
  2. The Operations Manager should hold a university degree or equivalent in financial sciences, accounting management sciences banking or law, as a minimum or the ACII certificate accredited by the Chartered Insurance Institute of London, or a certificate accredited by a similar professional institute.
  3. The Compliance Officer should hold a professional certificate in auditing or equivalent as a minimum or a university degree in financial sciences, accounting, management, or law and have a minimum of three (3) years’ experience in insurance or insurance brokerage.
  4. The broker must have at least one specialized professional for each licensed insurance type / class who shall meet the requirement of an accredited university degree or the Dip CII certificate from the Chartered Insurance Institute of London, or a certificate accredited by a similar professional institute.
  5. The insurance product sales employee must have a high school diploma, as a minimum, hold the Cert CII from the Chartered Insurance Institute in London or a certificate accredited by a similar professional institute and must not have previously terminated his services with any control authority for disciplinary reasons.

Solvency, financial reporting, disclosures and risk management

The Draft Law also touches on various additions in regard to the provisions of the titled subject such as the brokers obligation to maintain the required solvency to practice its activity which guarantees fulfilment of its obligations according to various conditions mentioned therein.

Contact Us

Should you wish to obtain further clarity on the above matters, please don’t hesitate to contact our firm and speak to one of our insurance law experts:

Raghad Hammad – Partner and Executive Director
rhammad@zubipartners.com

Adam Tighe – Senior Associate
atighe@zubipartners.com

President His Highness Sheikh Khalifa Bin Zayed Al Nahyan has issued a decree wherein the laws related to foreign ownership of companies in the UAE, governed by UAE Federal Law No. 2 of 2015 on Commercial Companies, will be amended.

The amendments are proposed to take effect from 1 December 2020, the most notable of which are:

  1. Removing the UAE national majority ownership necessity for UAE entities, save for:
    i) certain specified sectors, including oil and gas exploration, utilities and transport;
    ii) companies that are precluded from direct foreign ownership by virtue of UAE Cabinet decisions; and
    iii) companies that are wholly owned by federal or local governments or their subsidiaries. These changes are proposed to extend to branches of foreign companies which will no longer require a local registered agent.
  2. Companies intended to be converted into joint stock companies are permitted to sell up to 70% of their shares in an initial public offering (as opposed to the existing 30% threshold).

The above amendments are aligned with the UAE’s vision to promote an environment that encourages growth and foreign investment. These changes will undoubtedly have a positive impact on the UAE economy as foreign investors will respond favourably to the opportunity to own companies outright, and exercise full and unencumbered rights of management within the UAE.

The decree has not yet been officially released; however, further details are expected within the coming days, particularly with the imminent proposed implementation date for these changes.

Contact Us

Should you wish to obtain an advice related to the UAE foreign ownership laws or any assistance with company restructuring in the UAE, please don’t hesitate to contact our firm and speak to one of our corporate restructuring lawyers:

Raghad Hammad – Partner and Executive Director
rhammad@zubipartners.com

Adam Tighe – Senior Associate
atighe@zubipartners.com

The UAE Insurance Authority (‘IA’) have released a draft regulation, IA Board of Directors Decision No. (  ) of 2020 Regarding Instructions for Licensing Insurance Producers and Organizing and Monitoring their Business (the ‘Draft Producers Law’) wherein a number of criteria to regulate the profession of promoting insurance products on behalf of insurance companies established in the UAE, and foreign insurance companies licensed to conduct insurance activities in the UAE (through a branch or an insurance agent) (the ‘Insurance Entity(ies)’) have been proposed.

Activities of Insurance Producers

The activity of ‘Insurance Production’ is limited to marketing insurance policies by attracting natural or legal persons to introduce them to the Insurance Entities, the insurance services and products it provides, and the offers it prepares, using electronic (and other) means, and by placing an electronic link for the Insurance Entities for which they work on their online account or their addresses on social networks, multimedia sharing networks, collaborative work applications, so that insurance applicants are redirected to the website of the Insurance Entities.

Therefore, the ‘Insurance Producer’ is responsible for performing the task of marketing between the insurance company and the customer to obtain the insurance coverage. The Insurance Producer is not permitted to:

  • Fill out or sign insurance application(s) on behalf of the client(s).
  • Receive the insurance premium(s) owed to the insurance company.
  • Receive compensation due to the customer(s) for the purpose of paying such amounts to them.
  • Issue the insurance policy(ies) on behalf of the insurance company.
  • Issue certificate(s) of insurance.
  • Interfere in the subject of the claim(s) filed by the customer(s) to the insurance company.
  • Engage in the business of an insurance agent, an insurance broker, or any other insurance related profession.
  • Work for an insurance broker.
  • Work for an insurance agent unless the insurance agent obtains the approval of the assigned insurance company to contract with the Insurance Producer.
  • Deal with more than one (1) insurance company.

Further, the Insurance Producer is not permitted to transfer from one insurance company to another unless the IA are provided with the following:

  • Clearance from the (old) insurance company.
  • A letter from the (new) insurance company attaching its approval for the use of the Insurance Producer.
  • A letter from the (old) insurance company stating the termination of the contract between them.
  • A specific and signed undertaking from the insurance company.

It is also forbidden for the Insurance Producer to directly or indirectly leak previously marketed insurance policies from the old insurance company to the new company. When carrying out any advertising, promotion, or marketing for electronic or regular insurance operations, the Insurance Producer is required to comply with the provisions of the instructions for the practice of the profession.

The Insurance Producer is entitled to receive a commission, bonus, or any consideration from their customer.

Licensing and Registration

It is not permissible for any Insurance Producer to engage in the profession of marketing insurance policies through ordinary or electronic means in the UAE unless licensed / registered by the IA in the UAE for that purpose. Furthermore, Insurance Entities are not permitted to engage any entity for Insurance Production unless they are licensed by the IA for that purpose and are registered in the IA registry.

Insurance Producers who are citizens of the UAE are permitted to market insurance policies in all types and sectors of insurance. Insurance Producers who are not citizens of the UAE are permitted to market motor insurance and health insurance documents, however, the IA Director General may make an exception by permitting the marketing of other types and branches of insurance.

The following requirements must be met to be eligible for an Insurance Production license / registration:

For individuals, they must:

  • Have attained the minimum age of 18 years.
  • Hold the following qualifications:
    • For UAE citizens: a high school diploma, in addition to a course in insurance principles of not less than two (2) weeks.
    • For non-UAE citizens: a university degree, in addition to a course in insurance principles of not less than two (2) weeks.
  • Be of good conduct and not have been previously sentenced to a freedom restricting penalty in the crime of dishonour or dishonesty without being rehabilitated.
  • Have not had their license to practice any of the professions related to insurance previously cancelled.
  • Pass the evaluation conducted by the IA for licensing and registration in the registry, with the exception of holders of professional insurance certificates.
  • Not hold (either prior to or following the issuance of the license) position(s) on the insurance company’s board of directors or be the general manager or an employee of the insurance company to avoid potential conflicts of interest.
  • Submit a copy of the contract concluded between the applicant and the insurance company.

The application shall be accompanied by the following documents / particulars:

  • The name, nationality, address and place of residence of the license applicant.
  • A copy of the Emirates ID card or a copy of the passport with a valid residency.
  • The name of the insurance company for which they will work, and the types and sectors of insurance for which Insurance Production is to be exercised.
  • A valid certificate of good conduct issued by the concerned authorities.
  • A copy of the academic qualifications equivalency issued by the competent authorities in the country.
  • A copy of the training course certificate obtained.
  • A letter from the insurance company outlining their approval to appoint the applicant as an Insurance Producer if the IA’s licensing procedures are completed.
  • An undertaking to abide by all laws, regulations, instructions, and decisions issued by the IA.
  • An undertaking to fulfil all the licensing conditions required if the application is approved and to not start practicing the activity before the IA verifies that all licensing conditions have been fulfilled, and its approval is issued.
  • Any other documents, or data requested by the IA.

For Entities, they must:

  • Be a commercial company fully licensed in the UAE or in a financial free zone.
  • Include marketing insurance products within their duties.
  • Submit a no-objection letter from the authority from which the license was obtained for practising the profession of Insurance Producer.

The application shall be accompanied by the following documents:

  • Certified copy of the articles of association and license of the company.
  • A certified copy of the legal person’s license.

The Director General of the IA shall issue their decision approving or rejecting the application for licensing and registration within 15 business days of the complete application submission. Once approved, the legal or natural person is registered with the IA registrar and proof granting the right to practice Insurance Production is provided. The insurance company is to remain fully responsible for the actions of the Insurance Producer related to the insurance activity towards third parties, and they are required to undertake doing so in writing to the IA. The license will not be granted or renewed until the IA is provided with a copy of the undertaking.

The license period is for one year and expires at the end of December; the first license begins from the date of issuance and expires at the end of December of that same year. Any renewal(s) are to be submitted 30 days before the expiry date. The renewal application is to attach an approved statement issued by the insurance company regarding the work that the Insurance Producer carried out for their benefit and the compensation they were paid for their services. The Director General of the IA shall issue his decision regarding the renewal application, provided the Insurance Producer continues to adhere to the provisions of the regulations, within ten (10) business days from receipt of the complete application.

Relationship between an Insurance Entity and an Insurance Producer

The relationship is to be governed by a contract executed between the two parties and approved by the IA. The contract shall confirm the amount of commission that the Insurance Producer will receive in return for their Insurance Production services and the means of payment. The relationship between the Insurance Producer and the Insurance Entity is of a marketing nature only, and is not considered a relationship of agency, brokerage, or any other insurance related profession.

Ancillary Matters

The Draft Producers Law proposes to include a three (3) month grace period, wherein any individuals / entities practising the profession of Insurance Producer, who are not in compliance with these proposed laws, must satisfy all necessary steps and procedures outlined within the decision from the date on which the provisions come into effect.

In case the Insurance Producer does not comply with the laws, regulations, instructions and decisions issued by the IA or does not fulfil his legal and professional qualifications, certain penalties and procedures set forth by the Draft Procedures Law are applicable.

Contact Us

Should you wish to obtain further clarity on the above matters, please don’t hesitate to contact our firm and speak to one of our insurance law experts:

Raghad Hammad – Partner and Executive Director
rhammad@zubipartners.com

Adam Tighe – Senior Associate
atighe@zubipartners.com

The UAE Insurance Authority (‘IA’) previously released Cabinet Resolution No. 7 of 2019 on Administrative Fines Imposed by the Insurance Authority, wherein a lengthy list of penalties applicable to insurance companies, and insurance related professions (the ‘Insurance Entities’) were outlined.

The IA have since released a draft regulation, IA Board of Directors Decision No. (  ) of 2020 Regarding Grievance Procedures Against Administrative Fines Imposed by the IA (the ‘Draft Law’), wherein the process to object to any administrative fines issued by the IA is outlined.

According to the Draft Law, Insurance Entities who intend to file an objection to any administrative fines issued by the IA are required to object to the IA Council within a period not exceeding fifteen (15) days from the date of the notification of the decision. The application shall be submitted complete with the reasons for the objection, any applicable data, any other information required by the IA, and any supporting document(s).

The application shall be presented by the General Manager of the IA Board of Directors at the earliest board meeting held from the date of submission of the application. The IA Board of Directors shall review the application and provide its decision (i.e. to either accept, reject, or amend the decision appealed against) within a period of 60 days from the date of submission, which may be extended by a decision of the IA Chairman. The decision of the IA Board of Directors is not subject to any further objection(s).

Therefore, time is certainly of the essence, in the Draft Law, for the Insurance Entities to object against any administrative fines imposed by the IA.

Contact Us

Should you wish to obtain further clarity on the above matters, please don’t hesitate to contact our firm and speak to one of our insurance law experts:

Raghad Hammad – Partner and Executive Director
rhammad@zubipartners.com

Adam Tighe – Senior Associate
atighe@zubipartners.com

We have witnessed that a number of TPA’s operating within the UAE have been struck off from performing ongoing business due to negligent and / or delinquent conduct in recent times. In response, the UAE Insurance Authority (‘IA’) has released a draft regulation that governs the activities of health insurance third-party administrators (‘TPA’).

For sake of context, the primary legislative instrument that governs TPA’s is the Board of Directors’ Resolution No. (9) of 2011 Concerning the Instructions for Licensing Health Insurance Third Party Administrators and Regulation and Control of their Business (as amended) (the ‘TPA Resolution’). The TPA Resolution clearly defined the activities that TPA’s are permitted to perform, and the standards that they are expected to uphold. Specifically, Article 4 of the TPA Resolution stated that TPA’s are permitted to perform as follows:

  • Settlement of health insurance claims.
  • Payment of claims on behalf of the insurance company.
  • Management of health insurance programs approved by the insurance company.
  • Conclusion of agreements with medical care providers on behalf of the insurance company.
  • Preparation of health insurance programs provided that they are not marketed nor sold.
  • Establishment of a service providers’ network.
  • Provision of subscription consulting services.

Since the release of the TPA Resolution, the IA has sought to implement further safeguards to maintain the integrity of the profession and to protect the rights of the insured parties, the healthcare providers and the insurance company’s operating within the UAE.

Cabinet Resolution No. 7 of 2019 on Administrative Fines Imposed by the Insurance Authority outlined a lengthy list of penalties applicable to insurance companies and insurance related professions, with a considerable number of penalties related specifically to TPA’s. Thereafter, Circular No. 17 of 2020 on the Cessation of Violating Practices was issued as a warning to TPA’s that the performance of reinsurance practices is only permitted by companies licensed within the UAE to perform such activities.

The IA has since issued the Draft Board Resolution (  ) of 2020 Amending Certain Provisions of the TPA Resolution (the ‘Draft TPA Law’), wherein the following amendments, inter alia, have been proposed:

  • The definition of TPA shall be amended to ‘A company licensed before the IA to practice TPA business in accordance with the Draft TPA Law’.
  • Insurance companies or insurance related professions shall not engage in business with any entity / person who practices TPA services without holding the requisite licenses from the IA.
  • The scope of TPA’s shall be narrowed by the removal of the following responsibilities:
    • Payment of claims on behalf of the insurance company.
    • Provision of subscription consulting services.
    • Providing the insurance company with forms of agreements to be concluded with medical care providers before signing the same for approval thereof.
    • Settling the claim payments to the eligible persons upon their receipt from the insurance company.
    • Keeping book accounts for the insurance companies to register the amounts levied for the payment of claims.
    • Not keeping any remaining amounts as a result of settlement of the claims at an amount that is less than the coverage included in the insurance policies and return such amounts to the insurance company.
    • Not collecting any commission or interest on any amounts found at the banks in the account of the insurance companies, unless it is agreed upon otherwise, and in the event where the health insurance claims management company obtains any financial returns, commission or interest outside the concluded agreement, these proceeds shall be of the right of the insurance company.
  • The general manager is required to have not less than five (5) years’ experience with TPA’s. Further, the TPA is required to employ two principle employees: 1) an employee specialised in medical practices; and 2) an employee specialised in insurance, with both holding no less than five (5) years’ experience. These thresholds of experience are proposed to be increased from the previous three (3) year requirements.
  • Article 9(3) shall be amended to state ‘An agreement shall be executed between the TPA, the Insurance Company, and the Healthcare Provider in Arabic and shall remain valid until such time as the business between these parties’ ceases’. The agreement between these parties shall include the criteria as set forth in articles 9(1) and (2) of the TPA Resolution.
  • The insurance company shall not transfer its liabilities or obligations outlined within the respective insurance policies, either partially or entirely, to the TPA except by way of principle agreement, or an annexure to the agreement.
  • Any outstanding payments owing to the healthcare providers shall be paid directly by the insurance company to the healthcare provider through electronic transfer and the agreement shall not permit payment to be facilitated by the TPA (‘Direct Payment Clause 1’).
  • Any refunds to be transferred from the healthcare provider to the insurance company are to be paid directly, and not facilitated by the TPA (‘Direct Payment Clause 2’).
  • There may be exceptions granted to the Direct Payment Clauses 1 and 2, whereby such payments shall be permitted upon approval of the General Director of the IA, provided that:
    • An application is submitted by the insurance company to the IA confirming that it remains responsible for the dues until the rightful recipient(s) of the funds receive such amounts and that the receipt of the refunds by the claims management company is a fulfilment of its rights.
    • The TPA meets its solvency requirements and ratings.
    • The TPA has not committed any breaches of laws, regulations, or instructions.
    • The TPA must have a compliance officer who fulfils the following criteria:
      • Holds a professional certificate in auditing or its equivalent and has professional experience of no less than three (3) years in either insurance or insurance brokerage.
      • Has professional experience in external auditing or internal control, and has previously participated in the auditing of the business of insurance companies or insurance brokers, of not less three (3) years or two (2) years if they are a UAE national or hold a higher academic qualification.
      • Has the qualifications and experiences approved by the IA in the specified fields.
    • If the TPA has ceased business or unexpectedly stops / exits the market, the Insurance Company shall notify the IA immediately and indicate its procedures to remedy the relationship between the insured and the healthcare service providers.
    • Furthermore, Article 25 of TPA Resolution, wherein it is stated that the health insurance company and the TPA shall be jointly responsible for the implementation of the obligations of the health insurance company towards others in accordance with the agreement concluded between those parties, shall be repealed.

Consequently, it appears that the IA are taking a robust stance against TPA’s with a view to maintaining the integrity of the profession and to protect the rights of the insured parties, the healthcare providers and the insurance company’s in the UAE.

Contact Us

Should you wish to obtain further clarity on the above matters, please don’t hesitate to contact our firm and speak to one of our insurance law experts.

Dubai Office:

Al Zu’bi & Partners Legal Consultants
T. +971 4554 8182 | F. +971 4554 8183

Raghad Hammad        rhammad@zubipartners.com
Adam Tighe                 atighe@zubipartners.com

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