UAE insurers face tougher market entry test under new licensing regime

The Insurance Company Licensing Regulation (Circular 4/2026) establishes a new framework for the licensing of insurance companies and branches of foreign insurance companies, as well as the establishment of insurance branches and subsidiaries within and outside the UAE. It also classifies different classes of insurance business and sets out the requirements for registration, annual renewal and the commencement of insurance activities.

The regulation applies to insurance companies operating in the UAE, including branches of foreign insurance companies. Insurers incorporated in the financial free zones of the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) will be treated as foreign insurance companies for this purpose.

According to the CBUAE, the regulation is intended to support the organisation, development and regulation of the UAE insurance sector and forms part of the wider framework governing financial institutions and insurance businesses in the UAE.

Marie Chowdhry, a financial regulation expert at Pinsent Masons in the UAE, said: “This is a commercially significant change since licensing is no longer a purely technical exercise. The CBUAE will look at whether an applicant brings products which the UAE market does not already have, or products in strong demand, and whether it will increase premium retention in the country.”

“As such, the CBUAE is focusing on the applicant’s business plan and contribution to the market, and not just its technical readiness,” she added.

These factors are not merely matters for the regulator to weigh and consider. The regulation lists them among the grounds on which the CBUAE will reject a licence application, as well as the qualifications of founders and shareholders and the robustness and viability of the business plan.

The regulation is also notable for its treatment of foreign insurers.

Jessa White, a financial regulation expert at Pinsent Masons in the UAE, said: “International insurance groups and other foreign insurers that want to write business onshore in the UAE need a CBUAE licence and cannot rely on their existing home regulator’s authorisation. That applies equally to insurers in the DIFC and ADGM, whose free zone licences do not extend onshore.”

White added: “Applicants should treat the business plan as the centre of the application rather than a supporting document, because the regulation treats an applicant’s commercial contribution as a basis for refusing an application. Firms that have historically relied on technical compliance to obtain a licence will need to think about what they are contributing to the UAE market.”