November 7, 2019

New language requirements for UAE insurance policies

The language requirements for insurance policy documentation to be issued in (English or Arabic, or both) in the UAE has been somewhat unclear when taking into account the relevant regulations, and the practice followed in the insurance market. The position has been clarified following the UAE Insurance Authority's recently issued Administrative Decision No. 140 of 2019 Excluding certain insurance policies from the conditions of being drawn up in Arabic.

The Decision, which came into force on 14 October 2019, lists the types of insurance policies that are now exempt from the requirements to issue policies in Arabic, with a translation attached if any other languages are used, as set out in Article 28(1) of Federal Law No. 6 of 2007 Establishing the Insurance Authority and Regulating its Functions.  The penalties for failing to comply are listed in Cabinet Resolution No. (7) of 2019 Concerning the Administrative Fines Imposed by the Insurance Authority, which prescribed a fine of not less than AED 10,000 and not more than AED 50,000 that could be imposed on insurers.  

Pursuant to the new Decision, the policies that are now exempt from having to be issued in Arabic include marine and aircraft policies, oil related insurance policies, space related insurance policies and 'other insurance policies of an international nature which are required to be written in… English'. Article 1 of the Decision sets out the full list of exempt policies.

The clarity the new Decision brings is a welcome development.  However, the new Decision does not change the position that insurers are still required to submit specimen policy wordings for approval to the Insurance Authority in Arabic, and that if the policy is produced in court, the Arabic translation of the policy will be the document that is relied on by the court.  We would continue to strongly recommend that insurers take all steps necessary to ensure that they have a good, accurate Arabic translation of all their policy wordings on file, whether such policies need to be issued in Arabic or not.