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:
- Claims for summary relief or attachment orders;
- Insurance disputes that began the Decision came into force;, and
- Insurance disputes that are subject to an arbitration clause.
Some of the interesting changes clarified by the Decision include:
- The Committees will consist of three members, each appointed for a (renewable) one-year period;
- Each Committee will include a Chairman and two members appointed from the UAE Insurance Authority (Authority).
- The Authority may appoint a judge as the Chairman.
- When an Insured makes a claim under a policy, Insurers must respond to the claim applying the policy terms and in accordance with their obligations under existing (claims-handling) requirements of UAE law. If that does not resolve the claim, the Insured may submit a complaint to the Insurance Authority. The Insurance Authority can seek clarifications from the Insurer of its response, which must be provided within 5 days. Any final clarifications will then be sought from the Insured before the Insurance Authority proceeds to appoint the Committee to resolve the dispute.
- Insureds can file their complaints by electronic means (such as email), supported as necessary by available documents and evidence.
- The Committees must resolve all disputes within 15 working days from the date of submission of an application or complaint.
- This period may be extended for other similar periods upon the agreement of the parties to the dispute or by a decision of the Chairman of the Committee.
- The Committees will have a broad discretion to receive documents and evidence by electronic means, to manage the case and notify parties of hearings and meetings electronically and to hold remote hearings by means such as videoconference or telephone hearings in order to reduce the need for parties to attend in person.
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.