The eagerly awaited UAE Electronic Insurance Regulations have been in the consultation stage for some time now. Last year, we provided an update on the status of the draft Regulations and analysed some of the principle features which insurers and insurance professionals should be aware of – please see here.
The Insurance Authority (IA) has now released an updated draft of the Regulations, which contains some noticeable amendments from the previous draft, in particular with regards to Price Comparison Websites (the New Draft). We have considered these key amendments below.
Price Comparison Websites
The previous draft Regulations contained a prohibition on insurance companies dealing with price comparison websites. It was unclear from the previous draft whether this included online price comparison services offered by licenced brokers, or just those provided by non-licenced entities.
The New Draft now expressly authorises brokers to deal with price comparison websites, provided:
- The price comparison website is registered with the IA (renewable annually); and
- A copy of the agreement between the broker and the price comparison website has been provided to the IA.
Certain restrictions are also placed on price comparison websites. For instance, price comparison websites are prohibited from communicating with the customer; such communications can only come from by the broker. Price comparison websites are also required to submit an undertaking to the IA confirming that they will abide by the Insurance Law and all related legislation/regulations.
Lines of Business
The New Draft provides some additional clarity on the lines of insurance business which can be sold online.
The previous draft prohibited the online sale of life assurance products. This prohibition is maintained in the New Draft; however there is a carve-out for "off-the-shelf" life assurance products which do not require specific individual underwriting. It remains to be seen how broadly this carve-out will be interpreted, but it would appear that non-bespoke life assurance policies can now be sold online.
Certain other lines of insurance are expressly mentioned as being capable of being sold online i.e. health and fire. However, it is worth noting that the obligation to obtain prior approval from the IA before selling products online is maintained in the New Draft. This applies to all lines of insurance.
Pre Contractual Disclosure
In line with the consumer protection sentiment in the recently introduced Life Assurance Regulations, the New Draft also imposes disclosure obligations on insurers selling insurance products online. This includes a requirement to provide illustrations regarding the relevant insurance product at the point of sale, as well as providing self-assessment tools to enable the customer to assess his/her insurance needs before purchasing a policy.
In particular, the insurance company is obliged to show the effects of cancelling the contract, and the manner in which premium is to be refunded in the event of cancellation.
Requirement for Technical Licence
Finally, it is worth highlighting that the New Draft references the future introduction of regulations relating to digital licencing. These regulations would apply to digital insurance brokers, digital insurance agents and price comparison websites.
The content of the regulations have yet to be released, however it is possible that further detail may be provided in a later draft of the Electronic Insurance Regulations.