Recently introduced qualification and indemnity requirements are expected to significantly reduce number of consultants
New regulation issued by the UAE’s Insurance Authority is expected to result in a significant decrease in the number of insurance consultants in the country, a law firm has said.
Dubai-based BSA Ahmad Bin Hezeem & Associates LLP said the May 20 decision introduces strict new requirements to increase the quality of insurance consultancy services provided in the UAE.
All registered consultants have six months to submit the necessary documentation to maintain their registration with the authority.
Failure to do so will result in the cancellation of their licence and the inability to provide insurance consultancy services legally.
Among the new requirements are that consultants are barred from combining their profession with any other associated with insurance, such as a broker.
They must also meet educational and practical experience requirements and pass a test prior to registration.
Foreign companies wishing to practice insurance in the UAE will need to be licenced as consultants in their home country and all companies and individuals must meet new professional indemnity and insurance policy requirements.
These are a professional indemnity and insurance policy submitted to the authority with the sum insured of Dhs3m ($816,735) and a maximum deductible of Dhs30,000 ($8,167) for corporate insurance consultants. Employees of the consultant are not subject to this requirement.
For individual consultants the professional indemnity and insurance policy submitted to the authority must have an insured sum of Dhs5m ($1.36m) and maximum deductible of Dhs30,000.
Anyone found in violation of the decision faces penalties including but not limited to license suspension and/or cancellation, according to the firm.
“This decision will undoubtedly result in a significant decrease in the number of insurance consultants currently registered at the Insurance Authority as many won’t be able to satisfy the new prerequisites,” BSA Ahmad Bin Hezeem & Associates LLP said.