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Legality of UAE's New Insurance Law of 2023 and Its Notable Changes

Published on : 27 Feb 2024

UAE's New Insurance Law of 2023 and Its Notable Changes

The United Arab Emirates (UAE) has recently implemented a significant overhaul of its insurance sector regulatory framework through the introduction of Federal Law No. 48 of 2023, also known as the New Insurance Law. This law, which took effect on November 30, 2023, supersedes the previous Federal Law No. 6 of 2007. Its primary objective is the codification of the transfer of regulatory authority from the Insurance Authority to the UAE Central Bank, a move that represents a substantial shift in the oversight of the insurance industry.

One of the key aspects of the New Insurance Law is its scope and application as outlined in Article 2. Notably, Article 2(b) brings certain holding companies under its purview, specifically those acquiring 15% or more of insurance activity in the UAE, or where their insurance-related revenues exceed 50% of their total income. Additionally, the law differentiates between Financial Free Zones and non-Financial Free Zones, applying only to companies operating outside the Financial Free Zones. This distinction marks a significant change from the 2007 Insurance Law, which did not make such a specific separation.

Another major change is the replacement of the Emirates Insurance Association with the Emirates Insurance Federation, as stipulated in Article 100. This new body falls under the supervision of the Central Bank, which also has the authority to approve its articles of association. This development indicates an increased emphasis on structured governance within the insurance sector.

Perhaps one of the most critical changes is in the dispute resolution process for insurance claims. Under Article 101, the New Insurance Law replaces the Insurance Settlement Dispute Committee (IDC) with the Banking and Insurance Dispute Resolution Unit (BIDRU). BIDRU, established under the Central Bank Law, functions as an independent entity dedicated to resolving complaints against insurance companies. The New Insurance Law outlines a specific claims procedure that varies depending on the claim's value, offering different resolution avenues for claims exceeding AED 50,000.


Article 104 of the New Insurance Law further strengthens the regulatory framework by empowering the Central Bank to intervene in lawsuits involving insurance and reinsurance companies or insurance-related professionals. This intervention can take the form of providing clarifications, data, or information to the competent authority after an investigation. This provision reflects the Central Bank's proactive approach to ensuring compliance and fairness in the insurance sector.

The implications of these changes are significant. The shift of regulatory authority to the Central Bank underscores a strategic move towards centralized oversight and enhanced governance. The establishment of BIDRU as an independent dispute resolution entity streamlines the complaint and resolution process, potentially leading to more efficient and equitable outcomes. Furthermore, the distinction between Financial Free Zones and non-Financial Free Zones could have implications for how insurance companies structure their operations in the UAE.

The New Insurance Law represents a substantial development in the UAE's approach to regulating its insurance sector. With the Central Bank at the helm, the changes usher in an era of heightened oversight, improved corporate governance, and a more structured dispute resolution process. As the industry adapts to these changes, stakeholders should remain vigilant and informed about the evolving regulatory landscape to ensure compliance and understand the full impact of these new regulations.