In the UAE it is common for advisory firms with an Insurance Authority (IA) licence to allow third parties to put their business through them, therefore bypassing the need for the third party to directly hold a licence.
The practice has become more prevalent in recent years as the IA stopped issuing new licences in 2008 and International Adviser is not aware of any group, until now, which has declined to accept this business.
Zurich told its partner IFAs of its decision in a letter sent late last year that the practice “does not follow the IA regulations as all insurance brokers need to be licensed”. A copy of a letter obtained by International Adviser can be viewed here.
The insurer’s letter went on to stipulate that Zurich “will not accept any applications or paperwork which indicate that a policy has been sold through, or is handled by, any entity other than your company” and that client information will only be provided to individuals from the licensed company.
Zurich’s Paul Dawson, head of IFA relationships – Middle East, said the initiative has been “well supported by both the UAE insurance regulator” and broker partners.
“We continue to work in collaboration with the key stakeholders and market participants of the UAE, and, as in all of the markets in which we operate, we take a leadership role in the development of our industry,” said Dawson.
“We all believe this is another step forward in the journey toward increased industry standards and transparency which will benefit advisers and clients alike.”
One IFA firm operating in Dubai said it has written back to Zurich asking for clarification on its decision to ensure the way it operates is “100% legal”. In particular, the firm has sought clarification on whether or not its agents are still able to use their own brand (i.e. not the licensed brand), use separate agency numbers and use a different email address. At the time of going to press the company said it had not yet had a response from Zurich.
