Out-Law News | 11 May 2020 | 2:21 pm | 1 min. read
The United Arab Emirates (UAE) Insurance Authority (IA) has postponed the implementation of new regulations for life insurance for six months, as part of a package of measures designed to stimulate the economy during the coronavirus or Covid-19 pandemic.
The Instructions for Life Insurance and Family Takaful Insurance, commonly referred to as the ‘Life Regulations’, were due to be implemented in mid-April but will now come into force on 16 October 2020. The regulations were issued in October last year after two years of consultations, and will make substantial changes to the way the life insurance market in the UAE is structured.
Insurance law expert Tom Bicknell of Pinsent Masons, the law firm behind Out-Law, said: “It’s likely that the IA took a pragmatic approach when deciding to delay implementation of the new rules – considering the cost of implementation, against the external challenges the market is currently facing which have been exacerbated by the global Covid-19 pandemic.
“This extension will give clients some additional breathing space to ensure they are fully compliant with the extensive rule changes when they come into effect later this year,” Bicknell said.
The decision to postpone the implementation of the regulations was confirmed in a circular issued by the IA. At the same time, it extended the delivery dates of technical reports for insurance companies and annual and quarterly financial statements for insurance brokers, giving firms an extra financial period to submit these documents.
Sultan bin Saeed Al Mansoori, the UAE Minister of the Economy and IA chairman, said that the moves were in line with government directives and in support of stimulus initiatives for promoting economic growth within the country.
When the new Life Regulations do come into force, they will prescribe more information being given to customers on the terms and conditions of life insurance policies. Customers will also be able to ask for a full refund if they are unhappy with the policy within 30 days of purchase, and there will be a cap on commissions payable to financial advisers, amongst other changes.
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