The deregistration of the insurance brokers on 25 December followed a warning issued in July 2009 by the UAE Insurance Authority that the industry’s practitioners had until 24 December to satisfy a new minimum capital adequacy requirement, originally set out by the authority in 2007.

The requirement was that they set aside AED1m (£181,000, $272,000) for each broker’s main branch, double what it had been previously, and a guarantee of half that amount for each of the companies’ satellite branches. 

First significant action

As reported by International Adviser in its February issue and also online, the revocation of the licences was the first significant action taken by the relatively new regulator, and was seen by some observers to signal the beginning of a new era of increased supervision of the industry.
Industry estimates place the number of insurance broking firms operating in the UAE at more than 200.

Many UAE advisers complain of a lack of clarity with regard to the institutions they should be regulated by in order to sell different products. Some hold licences from the Ministry of the Economy, others the Central Bank or Insurance Authority (IA), while a few hold no licence at all. 

In January 2009 another financial regulator, the Emirates Securities and Commodities Regulator was established, sowing further confusion among advisers, some of whom have been told they must seek a licence from it as well.

The so-called free zone of the Dubai International Financial Centre (DIFC) also grants licences to a range of businesses, including wealth managers and financial planners. 

Reinstated licences

According to the Insurance Authority, the following firms have seen their licences reinstated: Al Khateri Insurance Brokers; Care Insurance Brokers; Al Thurayyah Insurance Brokers; Green Shield Insurance Brokers Co; Prominent Insurance Brokers; Dubai International Insurance Brokers Co; Al Mulla Atradius Insurance Consultancy & Brokerage; Al Nabeel Insurance Brokers Co; Northern Insurance Brokerage; Al Sahara Insurance Brokerage; Al Buraq Insurance Brokers; Ultimate for Insurance Brokers; and Expat Services Gmbh.

In a statement on the Insurance Authority’s website  in December, authority deputy director-general of the IA Fatima Mohammed Ishaq Al Awadhi said the IA had decided to de-register the brokers after they “failed to rectify their status, though the authority gave them an additional one-year grace period” in which to do so, on top of the initial two years.

When the three years ended, “the authority immediately decided to cancel each broker who did not meet the conditions."