The Isle of Man Financial Services Authority (IOMFSA) has opened a consultation to amend the Insurance (Conduct of Business) (Long-Term Business) Code 2018.
The regulator wants to make Isle of Man-based life insurers with operations in the UAE provide key information documents (Kids) for the products they distribute in the region.
When the code was introduced, the watchdog allowed a “transitional exemption” for firms with operations in several jurisdictions, including the United Arab Emirates.
The financial watchdog said this was because the UAE’s Insurance Authority (IA) was working on a piece of regulation that was “comparable” to the IOMFSA’s requirements, known as BOD49, which came into force on 15 October 2020.
This means that any business regulated by the IA will still be exempt from issuing Kids.
But firms operating in the “free zones”, such as the Dubai International Financial Centre (DIFC), will not.
‘Anticipated’
The IOMFSA said: “The authority considers that applying the exemption to IA regulated insurers only, will improve the likelihood of positive customer outcomes for insurers who are operating in the free zones, as well as continuing to reduce complaints received.
“At the time the original exemption was agreed, it was made clear that it would be temporary until such a time as the IA’s conduct regulations came into force, therefore it should not come as a surprise.
“Given this lead in time, including a further 15 months whilst the exemption has been in force, we expect impacted firms should have anticipated and prepared for having to produce and issue Kids, therefore it is expected they should be on a path towards compliance.”
‘No surprise’
This means that, if the amendment is passed, Isle of Man life insurers that have a base in the DIFC and other free zones will be required to issue Kids starting from 30 April 2021.
Peter Kenny, chief executive of Quilter International, which distributes products in the UAE through the DIFC, told International Adviser: “At the time the IOMFSA granted this transitional exemption, it was very clear that it would be reviewed when the IA’s conduct regulation came into force.
“Whilst that regulation has been a long time coming, now that it is here this consultation by the IOMFSA is very much expected by industry and in accordance with their prior clear messaging on the subject.”
The IOMFSA’s consultation is open for feedback until 15 January 2021.
