Insurance brokers in the UAE are subject to a new legal regime which requires an increase in minimum capital, financial guarantees and PI insurance. In order to obtain a licence, the broker must now appoint a “technical cadre” of specified professional experience and qualifications.

The new Insurance Brokers Regulation (Resolution No. 15 of 2013 of the Insurance Authority Board of Directors, Brokers Regulation) applies to insurance brokers in the UAE (including Free Zones).

The Brokers Regulation is complemented by Resolution No.58 of the Insurance Authority (the Supplementary Regulation), which provides further information relating to, among other things, the qualifications and experience required by members of the profession and the solvency requirements for brokers.

In this article, we identify some of the key features of the regulations.

Life and non-life separate; insurance and reinsurance separate

Insurance brokers can conduct both (i) life insurance and associated capital operations, and (ii) general insurance business, provided that the two are kept entirely separate.

The position remains that an insurance broker cannot be both the insurance and reinsurance broker in the same transaction for the same customer, although an insurance broker may provide reinsurance broking services.

The broker must also keep separate accounts for its own and its clients’ funds.

Licensing requirements

Capital and solvency

The Brokers Regulation sets down the requirements for obtaining and maintaining a broking licence, including the requirement for paid up capital: AED3 million for UAE companies, and AED10 million for branches in a Free Zone or branches of a foreign company.

The Supplementary Regulation introduces a strict solvency margin on brokers that requires the broker to maintain “available capital” (the difference between the value of its assets over its liabilities) not less than “the required minimum” (i.e. the amounts set out above) at all times.

Qualifications for brokers

Licensing requirements in the regulations include the appointment of a technical and administrative cadre, with specific technical and professional skills/requirements and qualifications.

This means that brokers must have: (i) a Director General or CEO;(ii) an Operations Manager/Internal Controller; and (iii) a specialised employee for each licensed insurance type.

The Director General/CEO is required to have: (i) an academic degree or ACII certified by the Chartered Insurance Institute in London/or similar professional institute; (ii) passed at least three training courses in insurance or in insurance brokerage; and (iii) had 10 years (five years for UAE nationals) of practical insurance experience if they do not hold a “postgraduate qualification”, or five years (two years for UAE nationals) of practical insurance experience if they do hold a higher education certificate.

The Operations Manager is required to have: (i) three years (one year for UAE nationals) experience if holding an academic degree or its equivalent (the academic degree must be in financial sciences, accountancy, administrative sciences, banking or law) or six years (two years for UAE nationals) experience if they do not hold an academic degree.

An Internal Controller must have: (i) an academic degree or its equivalent in finance, accounting or law or an accredited financial professional certificate approved by the Authority; and (ii) practical experience in external or internal audit and have participated in auditing the business of the insurance or insurance broker companies of not less than three years (two years for UAE nationals).

A specialised employee for each insurance type is required to have: (i) an academic degree; and (ii) practical experience in the licensed insurance type or branch for five years (three years for UAE nationals). The academic requirements for a Branch Officer are more extensive than that of a specialised employee.

The broker’s byelaws

The Brokers Regulation obliges the broker, within three months of obtaining its licence, to draw up its byelaws and file them with the Insurance Authority. These byelaws must include provisions for the management of documents between the insurer and its customer, including systems for: correspondence, record keeping and complaints; risk management manuals; and professional conduct for the broker’s staff.

Broker’s obligations to the insurer

The broker must sign an “insurance brokerage agreement” (TOBA) with each insurance company. The TOBA must be in Arabic, notarised, and include certain provisions which are specified by the Brokers Regulation.

Broker’s obligations to the customer

The Brokers Regulation also codifies a broker’s duties to its customers and the broker must obtain written confirmation (in a specified form) before acting for a customer. The broker must also set out the importance of disclosure, notify the customer of the details of the policy including the scope of cover and exclusions, notify its customer 20 days before the expiry of a policy and ask whether the customer requires the policy to be renewed.


The regulations clearly set out the broker’s obligations to the Insurance Authority, the insurers and its customers. They also provide the requirements for obtaining and maintaining a licence, and the merger and consolidation of brokers.

Together with the Insurance Authority’s Directive to insurance companies (see our February 2013 Briefing, these new regulations form a significant development in regulation of the insurance sector in the UAE, one which brokers in the UAE will need to carefully consider.