UAE Overhaul’s Insurance Laws: Bidru, Central Bank Supervision, and Regulatory Changes

The Insurance Settlement Dispute Committee (IDC) has undergone a transformation, giving rise to the new Banking and Insurance Dispute Resolution Unit (Bidru) in alignment with the recently enacted UAE insurance laws. Tasked with independently handling complaints against insurance companies, Bidru stands as a distinct legal entity. Its purview extends to resolving disputes arising from insurance contracts, services, and operations. Notably, under the fresh regulations, Bidru’s decisions are conclusive for claims valued at or below Dh50,000. In cases surpassing this threshold, insurers have the option to contest the unit’s decision within 30 days, appealing to the Court of Appeal.

Implemented on November 30, 2023, the new Federal Law No. 48 of 2023 supersedes Federal Law No. 6 of 2007. The law introduces several changes, allowing the purchase of insurance from foreign companies when unavailable domestically. Electronic issuance of policies is now permitted, and specific policies may be exempted from the requirement of being in Arabic.

Additionally, the Emirates Insurance Association has been replaced by the Emirates Insurance Federation, now under the supervision of the UAE Central Bank. Article 104 of the new insurance law empowers the Central Bank to intervene in lawsuits involving insurance entities, providing clarifications, data, or information to the competent authority.

The primary objective of the new insurance law appears to be the transfer of insurance regulation from the Insurance Authority to the UAE Central Bank. While maintaining provisions from the 2007 Insurance Law, the new legislation specifies that regulations and circulars from the prior law remain in force unless contradictory. Notably, the new insurance law is applicable to companies in non-financial free zones and onshore UAE but does not extend to those operating in financial free zones. This distinction clarifies the scope and application of the law to different types of zones, aligning with the evolving regulatory landscape.