The offshore division of Old Mutual Wealth said its focus is on the sale of “single premium investment solutions” which are only sold via intermediaries licenced to sell investment business.
Intermediaries advising on investment products to consumers in the UAE are licensed by the Emirates Securities and Commodities Authority.
In a statement, Skandia International said: “We have a strong, well established business in the DIFC with a robust business model, which focuses on single premium investment solutions targeted at firms authorised to sell investment business.
“The number of firms authorised to sell investment business is increasing, and we are seeing a growing demand for this type of business. We have a sustainable business model and remain committed to building the business in the region and expanding into new markets, such as Africa.”
In contrast, while Standard Life had also been selling investment products, some of the intermediaries through which the products were sold were Insurance Authority (IA) regulated and had recently come under pressure from the Authority not to sell products from companies which were not also IA regulated.
Under local laws in the United Arab Emirates, IA licensed firms are only able to conduct insurance related transactions with other IA licenced entities. While this has been the case for some years, in recent months the regulator has taken what Standard Life yesterday described as a “hardening stance” to its implementation of the rules.
This move for greater transparency and tighter regulation was also highlighted last month when the IA published a full list of businesses which are authorised to conduct insurance business. Furthermore, on the 28th of this month, new rules are due to be implemented by the IA and it is anticipated that the regulator will be much more stringent in ensuring adherence to them.
Speaking to International Adviser yesterday, Standard Life’s Asia and emerging markets chief executive Alan Armitage said: “Prior to this year, it was never really spelled out in precise terms.
“It was previously, that while IA licensed firms couldn’t deal with non-IA entities for insuring risk – life insurance basically – they could deal with them for investment contract purposes – as we were offering.
“The position hasn’t changed, but specific guidance was given to companies – i.e. the brokers were told they should only be dealing with providers which were IA licensed.”
