Insurance & Reinsurance
The UAE Insurance Authority has recently published its much-anticipated Regulations explaining how the Insurance Committees, which were first announced in mid-2018, will operate in practice. We summarise below the background to this important development.
On 15 July 2019, the UAE Insurance Authority issued a decision, Decision No. 33 of 2019, relating to the regulation of Insurance Disputes Resolution Committees (Decision). The Decision was previously foreshadowed by UAE Federal Law No. 3 of 2018 amending Law No. 6 of 2007 (the Insurance Law). The Decision will come into force three months after publication in the Official Gazette. To date, we have yet to be advised that the Decision has been published.
The Decision provides for a new system for the settlement and resolution of UAE insurance disputes through the establishment of specialist committees. We are still awaiting clarification of some of the new changes, but set out the key issues below:
The Decision provides for the formation of mandatory "Committees" (similar to those operating in Saudi Arabia) to settle and resolve all types of retail and commercial insurance disputes relating to all insurance products, whatever their value, resulting from complaints by Insureds, other beneficiaries, and interested parties against Insurers.
However, the Committees will not have jurisdiction to adjudicate the following types of claims:
Some of the interesting changes clarified by the Decision include:
Evidently, therefore, the Decision introduces some very tight deadlines; it remains to be seen whether those timeframes can in fact be implemented in practice.
These Committees are likely to fundamentally change the UAE insurance claims landscape. As such, all insurers with a presence in the UAE (and reinsurers writing business in conjunction with local Cedants) will need to consider the implications of the Decision on their claims-handling operations.
For those wishing to opt out of the new Committees, the need to agree clear and enforceable arbitration clauses has never been more important.