Proposed Draft Regulation: The Registration of Insurance Brokers and Organisation of their Operations

Analysis

The Insurance Authority (“IA”) issued a circular in August this year containing the proposed new regulations (the “Regulations”) in relation to Insurance Brokers, their registration requirements, basic rules on organisation structure, as well as guidance on the relationship between Broker, Insurer and Client.

More guidance is provided than in the existing laws and regulations and there are a few important matters of note, including changes to registration and capital requirements (differing between local and foreign brokers), guarantees and premium collection.

Capital

For Local Brokers, the Regulations have increased the minimum paid up capital requirement to AED5 million, up from AED1 million as currently stipulated in the Ministerial Decision No. (543) of 2006 regulating of Insurance Brokers' Profession. There is still a 51% local share capital ownership requirement in terms of a Local Broker.

Where the Broker is classed as foreign (branch), it requires a minimum paid up capital of AED10 million in its country of registration and they requirError! Hyperlink reference not valid.e a local national representative.

Financial Guarantees