The Insurance Authority (IA) has licensed three firms since the start of the year, matching the total number it issued in the whole of 2015. Prior to 2015, the IA had not issued a licence in five years.
Industry observers in Dubai said the fact that licences were being approved reflected the fact the IA had now brought all existing brokerages under its current compliance regime.
The IA issued regulations for insurance brokers at the end of 2014, which involved new capital requirements and corporate structures. It was widely expected then that until all IA regulated brokers were brought within these new rules there would be few new licences.
“Now they have proper regulations, existing brokers [working] within the rules, and an application process laid down, there is no reason for the IA not to start issuing licences,” said one industry participant who wanted to remain anonymous.
List grows again
To date in 2016, the IA has issued broker licences to Ascot & Fitch Insurance Brokers, Unity Insurance broker and Guardian Wealth Management.
Guardian Wealth Management chief executive David Howell, who is a member of International Adviser’s intermediary panel, said he had been delighted to get the new licence having waited nearly a year for the process to be completed.
“This provides the Guardian group with the opportunity to continue our regional expansion plan throughout the UAE,” Howell said.
But Nigel Sillitoe, chief executive of market research firm Insight Discovery, said while it was encouraging that the IA had issued new licences, there were still hurdles facing firms seeking to set up in the UAE.
“Having spoken to several senior executives at firms that are licensed by the IA, it is certainly not impossible to receive a licence, it is just that it can take years and lots fees, for example to lawyers, before the licence can be issued,” Sillitoe said.
Insurance licences awaited
The next development many in the UAE will be waiting for is signs of any shift in the issuance of new insurance company licences. There has only been one new insurance licence issued in the past five years.
On 28 December 2014, the IA issued long-awaited financial regulations for conventional insurance companies, which came into force on 29 January 2015. The regulator is currently in the process of trying to sort out any companies that do not meet licensing requirements.
Insurers have a grace period of between one and three years to comply with the new regulations, so the issuance of any new licences may still be some way off.
At an International Adviser roundtable in Dubai late last year, life companies all agreed that one thing is certain, large-scale regulatory change for the region is in the air.