The Emirates Insurance Authority recently published “circular no.48”, which proposes the introduction of a number of new regulatory requirements for brokers selling insurance products.
This includes introducing minimum qualification levels for brokers, requiring brokers to report annually to the authority and increasing the capital which needs to be held as assurance by the brokerage.
Lufti said the EIA had been involved with original consultations with the authority which ultimately led to the publication of the proposed new regulations and therefore it is in complete support. However, he acknowledged that some brokers are likely to have “mixed feelings” about the proposals.
“In my opinion, and to be realistic, UAE is off to a good start. Mind you this now still a draft and awaits feedback on the consultation circular from brokers. The insurance companies’ views are already given to the authority accepting the changes. Brokers do have mixed feelings, and why not?” said Lufti.
“In my opinion, mis-selling and lack of experience do exist in the region – having said that however, not all financial advisory companies are alike.”
Lufti added that there are many brokers in the region with very strong internal training programmes and prequalification requirements.
“Professional companies whether on financial advisory or general insurance products sales do train, but the number is smaller than what the market wishes to be,” said Lufti. “Prudential rules and regulations definitely combat unscrupulous selling.”
