The United Arab Emirates (UAE), has issued a new insurance law, Federal Law No. 48 of 2023 (the New Insurance Law), expressly repealing Federal Law No. 6 of 2007 (as amended) (the 2007 Insurance Law).
The New Insurance Law was published in the official Gazette on 31 October 2023 and came into force on 30 November 2023.
The primary purpose of the New Insurance Law would appear to be the codification of the transfer of insurance regulation from the Insurance Authority to the UAE Central Bank. Indeed, many provisions of the 2007 Insurance Law remain, and the New Insurance Law expressly provides that the regulations and circulars issued pursuant to the 2007 Insurance Law remain in force to the extent that they do not contradict the provisions of the New Insurance Law (Article 114(2)).
The Insurance Settlement Dispute Committee (IDC) has been substituted with the Banking and Insurance Dispute Resolution Unit (Bidru) under the new UAE insurance laws to work as an independent juristic personality established to receive and resolve complaints against insurance companies.
Under the new laws, the unit would also settle disputes arising from insurance contracts, works and services.
According to global law firm Holman Fenwick Willan (HFW), the new law states that insurer cannot appeal the decision made by the Bidru if the claim value doesn’t exceed Dh50,000 under the new UAE insurance laws issued by the government. If the claim value exceeds Dh50,000, the insurer can appeal the unit’s decision within 30 days from the issuance date or notification of the decision before the Court of Appeal.
“The fact that decisions are referred to the Court of Appeal illustrates that the Bidru will act as an equivalent to the UAE Court of First Instance, and is a welcome step in reducing the stages required to reach a final binding judgement in respect of insurance claims,” said Sam Wakerley, head of insurance and reinsurance Holman Fenwick Willan (HFW) in the Middle East.
Central Bank intervention
Meanwhile, Article 104 of the new insurance law establishes the Central Bank’s capacity to intervene in any lawsuit filed before judicial authorities to which one of the parties is an insurance company, reinsurance company or any insurance-related professional.
Upon notification of the lawsuit, the Central Bank may submit any clarifications, data or information, to the competent authority following investigation into the matter. In addition, the UAE’s new insurance law will be applicable to companies operating in non-financial free zones and onshore UAE but shall not apply to companies operating in financial free zones.
