New insurance brokerage regulations in the United Arab Emirates

The Central Bank of the United Arab Emirates (CBUAE) has introduced new regulations governing the insurance brokerage business in the country. This Regulation replaces the one previously in force since 2013, and will be effective starting 15 February 2025.

The new Regulation's provisions include the following:

• insurance brokers may not combine their role with that of any other insurance-related profession. Nor may they be partners or agents of another broker.
• all brokers must appoint an external auditor approved by the CBUAE to audit their financial statements, systems and controls
• the amount of the unconditional bank guarantee remains unchanged at 3 million AED (816 670 USD) for a local broker, with an additional 1 million AED (272 220 USD) for the creation of a branch. Brokers setting up in a Free Zone or as a branch of a foreign broker must pay a deposit of 5 million AED (1.4 million USD) with an additional 3 million AED (816 670 USD) to set up a branch.
• minimum capital requirements to apply for a license also remain unchanged: 3 million AED (816 670 USD) for local brokers and 10 million AED (2.7 million USD) for foreigners
• brokers are now prohibited from settling claims. Claims must be paid directly by insurance companies. This provision applies only to direct insurance operations. Reinsurance operations are not concerned.
• brokerage activities may only be carried out after obtaining CBUAE approval. Approvals may be granted for three types of brokerage operations in the country: direct insurance, reinsurance and composite (direct insurance + reinsurance).

The full text of the Regulation is available on the CBUAE website: https://rulebook.centralbank.ae/en/rulebook/insurance-brokers%E2%80%99-regulation