UAE: Insurance & Reinsurance

The UAE is often described has having two separate but interconnected and interdependent insurance markets: the ‘onshore’ UAE market and the ‘offshore UAE market’ which comprises the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), of which the latter two are largely wholesale ‘offshore’ reinsurance centres.

With the exception of the DIFC and ADGM, the UAE insurance market is currently supervised by the UAE Federal Insurance Authority (IA) pursuant to Federal Law No. 6 of 2007 on the Establishment of the Insurance Authority and Regulation of its Operations as amended by Federal Law No. 3 of 2018 (Insurance Law). However pursuant to article 3 of Federal Decree Law No.25/2020 issued on 27 September 2020, the Insurance Authority was merged into the Central Bank of the UAE (CBUAE). It should be noted that references to the CBUAE and the IA are used interchangeably throughout this paper. In January 2021, the CBUAE announced the commencement of operational procedures aimed at assuming the supervisory and regulatory responsibility of the insurance sector. While this transformation is on-going the CBUAE confirmed that the rules, decisions, circulars and regulations issued by the IA under the provisions of the Insurance Law will continue to apply to all licenced institutions and activities until replaced by regulations issued by the CBUAE.

The IA oversees all insurance business in the UAE. However, for the offshore insurance market i.e. insurers based within the DIFC or the ADGM, the Dubai Financial Services Authority (DFSA) and the Financial Services Regulatory Authority (FRSA), respectively, regulate DIFC and ADGM-based insurers and reinsurers. Each regulator has its own specific requirements for the authorisation, licensing and regulation of companies offering insurance services.

In addition to the above, there are separate dedicated regulators for the health insurance sector in certain individual Emirates. These are the Dubai Health Authority, the Department of Health of Abu Dhabi and the Sharjah Health Authority.

In relation to the actual writing of insurance contracts and policy wordings, the majority of policies executed in the UAE incorporate London market wordings. Policies issued in the UAE are to be issued in Arabic (article 28 of the Insurance Law) (although there are some exceptions), and may be translated into any other language. If there is a difference in interpretation between the two languages, the Arabic version will prevail.

Should there be uncertainty as to the meaning of a policy term, it will be construed by the court in favour of the obligor (article 266(1) Civil Code). It is permissible to construe ambiguous wordings in policies against the party that put it forward or the party that benefits from it if they are deemed to be contracts of adhesion (article 266(2) Civil Code). Should there be scope for interpretation of the policy, the court will make enquiries into the ‘mutual intentions of the parties’, as well as the nature of the transaction, and the trust and confidence that should exist between the parties (article 265(2) Civil Code). However, where the wording of a policy is clear, it may not be departed from by way of interpretation to ascertain the intention of the parties (article 265(1) Civil Code).

The regulation of insurers offering different lines of insurance varies within the UAE. A key example of this are the regulations governing life insurers. As per the Insurance Law, a guarantee of 4million UAE Dirhams must be submitted to a UAE bank in order to write life insurance, whereas all other types of insurance (property and liability insurance) must have a guarantee of 2million UAE Dirhams (article 42 Insurance Law).

The separation between life insurers and non-life insurers is set to increase further due to the IA’s Regulations for Life Insurance and Family Takaful Insurance (Decision No. 49 of 2019) which were issued in October 2019 and came into force on 16 October 2020. The regulations place an upper limit on any commission paid to any ‘Distribution Channels’, which are defined as insurance agents, insurance brokers and the marketing of insurance policies through banks or finance companies, and the direct promotion of a company through its employees. The limits apply to the sale of ‘Pure Protection Products’ (any insurance product that has a protection benefit for a covered peril, but has no cash value) and ‘Savings Products’ (any insurance product that has a cash value). The regulations stipulate that indemnity commission will be payable over the term of the product rather than as an up-front cost. There are also new provisions regarding the transparency of information provided to customers, so that they are aware of fees and commissions.

Further, Takaful insurance (an alternative system of cooperative Islamic insurance) is primarily subject to the same UAE laws as non-Takaful insurance, although there are some differences, for example, relating to policy content (Board of Directors Resolution No. 4 of 2010 Concerning the Takaful Insurance Regulations) and premium distributions.

In 2018, the IA passed a number of regulations in relation to brokers and insurance intermediaries, the rationale of which was to widen the scope of the IA’s powers and provide additional protection to policyholders. Specifically, the IA introduced the Resolution of the Insurance Authority Board Decision No. 12 of 2018 On the Law of Licensing and Registration of Insurance Consultants (‘Registration of Insurance Consultants’). This included the prohibition of persons from practising the profession of an insurance consultant or broker without a licence from the IA (article 2 of the Registration of Insurance Consultants). A brokerage licence is valid for one year and renewable annually (article 9 of the Registration of Insurance Consultants) with stipulations governing a broker’s professional indemnity insurance which it is required to maintain.

As discussed above, brokers require a licence to conduct or service business in the UAE. In relation to insurance companies, it is compulsory for any business wishing to conduct insurance activities (including the servicing of such activities) within the UAE to obtain a licence from the IA. In addition to a licence from the IA, TPAs and insurers dealing with medical insurance are also required to obtain a permit from the relevant healthcare authority, depending on the Emirate in which they conduct business.

The timeframe from the submission of the initial application to approval by the IA can take between four to six months.

Towards the last quarter of 2018, the UAE introduced a new Direct Foreign Investment Law (Federal Decree-Law No. 19 of 2018), permitting 100 percent foreign ownership of businesses located in on-shore UAE. The rationale behind the law was to promote further foreign investment in a manner consistent with the development policies of the UAE. Despite this, several economic sectors and activities are prohibited from being 100 percent owned by foreign investors including insurance (article 7(2)(d)).

Insurance activities may be exercised within the UAE either by way of a public joint-stock company, listed on a UAE stock exchange and with UAE nationals owning at least a 51 percent stake in the company; a branch of a foreign insurance company; or an insurance agent (article 24 of the Federal Law No. 6 of 2007 on Establishing the Insurance Authority and the Regulation of its Operations as amended by Federal Law No. 3 of 2018).

Non-admitted insurers are strictly prohibited under UAE law from writing direct business in the UAE. This prohibition applies to all types of insurance business. Article 26 of the Insurance Law provides that it is not permissible for insurers based outside the UAE to write insurance on property or on liabilities within the state. In addition, it is not permissible to carry out broking activities except with a company registered with the IA. The DIFC and ADGM also prohibit non-licensed insurers operating within their jurisdictions. However, it should be noted that an insurer may reinsure both in and outside the UAE.

All insurers are regulated in the UAE and whether a branch of a foreign insurer or locally established entity, their activities must be registered and licensed by the IA.

In accordance with Cabinet Resolution No. 7 of 2019 Concerning the Administrative Fines Imposed by the IA, any person carrying out insurance or reinsurance activities within the UAE, without obtaining a licence from the IA is liable to a fine of 250,000 UAE Dirhams. The IA may report the defaulter to the regulator in its country of origin.

Since its inception in 2007, the IA has made huge strides in bringing the regulation of the UAE insurance market in line with international best practices. With regard to the IA, there has been a progressive increase in regulation (particularly since 2014), creating a robust legal framework in which insurers must operate. As the scope of IA governance includes insurance and reinsurance companies and licensed insurance intermediaries located or operating in the UAE it is evident that the supervisory environment is both wide-reaching and rigorous. In addition, the UAE has also witnessed an increase in regulators working together in order to strengthen confidence in the insurance market. Both the IA and the Emirates Securities and Commodities Authority (ESCA) recently launched the Middle East’s first financial advisory aggregator site (whichfinancialadviser.com (WFA)) which lists insurance advisory firms licensed and approved by the IA, the aim of which is to protect consumers from cold calling advisers and scammers.

Not only has the regulatory landscape increased but so has the enforcement of such regulations. Much of the enhanced scrutiny by the IA in relation to insurers and insurance intermediaries has resulted in increased cooperation between the regulators and insurers and insurance intermediaries, which in turn provides both a strong and stable market providing conditions in which the market can thrive.

Both the Board of Directors’ Decision No. 25 of 2014 on the Financial Regulation of Insurance Companies and the Board of Directors’ Decision No. 26 of 2014 on the Financial Regulation of Takaful Insurance Companies (together the ‘Financial Regulations’) establish the regulations insurers must adhere to in relation to their solvency and minimum capital requirements.

In addition to the provisions outlining minimum capital requirements for insurers and reinsurers (as discussed in detail below), the Financial Regulations impose the need for insurers to ensure that their assets are diversified with new limits in respect of aggregate exposures in individual asset classes and sub-limits for exposures to a single counterparty being imposed. The maximum limits for aggregate exposure in a particular asset class include 30 percent in real estate, 80 percent in government securities issued by A rated countries, 100 percent in UAE government securities and 30 percent for loans secured by life policies. It should be noted that the Financial Regulations also impose a minimum 5 percent to be invested in cash deposits with a UAE state bank.

Section 3 of the Financial Regulations sets out detailed guidelines in relation to the calculation of unearned premium reserves, unexpired risk reserves, outstanding loss reserves, incurred but not reported reserves, allocated loss adjustment expense and unallocated loss adjustment expense reserves and mathematical reserves.

Significantly, all insurers must appoint an actuary who is registered with the IA to review and approve the above calculations. Insurers must report quarterly to the IA in relation to their calculation provisions. Further, insurers must submit annual reports to the IA which have been certified by the actuary, authenticated by an external auditor and endorsed by the insurer’s Chairman. The Financial Regulations also set out the minimum content that must be contained in an actuary’s annual report which is to be provided to the IA.

The Financial Regulations dictate that the minimum capital requirements are 100million UAE Dirhams for insurers and 250million UAE Dirhams for reinsurers. In addition, the Financial Regulations now require that:

• Insurers maintain a minimum guarantee fund, which is not less than one third of the Solvency Capital Requirement;
• Insurers calculate their solvency margin using the template developed and amended by the IA;
• An insurer’s Solvency Capital Requirement must take into account underwriting risk, market and liquidity (investment) risk, credit risk and operational risk;
• The Financial Regulations require insurers to notify the IA immediately in the event of non-compliance with the Minimum Capital, Solvency Capital Requirement or Minimum Guarantee Fund.

As per the Cabinet Resolution No. 7 of 2019 Concerning the Administrative Fines Imposed by the IA, the failure of an insurer to comply with the Solvency Margin and the Minimum Guarantee Fund in accordance with the provisions of the Financial Regulations will result in a fine of 150,000 UAE Dirhams.

Currently, there is no Policy Protection Scheme in the UAE that protects policyholders in the event of a failure of an insurer.

In practice insurers are not regulated on a group-wide level. The regulator (for example, the IA), will have regard to the particular activities of the entity in determining its regulatory requirements (for example, capital and solvency requirements). Further, if activities are outsourced to third-party providers then they too may come within the regulatory oversight of the applicable regulator.

As per article 5 of IA Board Resolution No. 15 of 2013, the IA must approve individuals working as technical staff such as Chief Executive Officers, General Managers and Operations Managers. Such technical staff must have no criminal record and never have been the subject of bankruptcy proceedings.

Further, article 3(12) of Board Resolution No. 3 of 2010 makes provisions for an insurer regulated by the IA to circulate the Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies Operating in the UAE to its employees, as well as develop internal professional codes of conduct for the company and its employees.

Article 23 of IA Board Resolution No. 15 of 2013 provides for the IA to sanction employees that commit regulatory breaches with the following penalties:

• Warning;
• Suspension from practicing the activity for a maximum period of two months;
• Cancellation of the accreditation in case of excessive breach of the Law, regulations, instructions, resolutions or circulars issued by the IA.

There is no minimum requirement for a foreign insurance company or a branch of a foreign insurance company to perform insurance activities provided that it has an established presence in the UAE and a licence pursuant to Article 26 of the Federal Law No. 6 of 2007 on the Establishment of the Insurance Authority.

There is no general provision under UAE law which authorises insurers to outsource parts of their business. Rather, specific activities are authorised to be outsourced to service providers such as:

• Health insurance administrators under the IA Board Resolution No. 9 of 2011 Concerning the Instructions for Licensing Health Insurance Third Party Administrators (TPAs) and Regulation and Control of their Business
• Providers of health insurance can outsource claim handling, developing and managing health insurance programs, and negotiating agreements with medical service providers to TPAs that specialise in health insurance and that are licensed by the IA. Health insurance TPAs may also provide consultancy services in underwriting; however, they may not sell nor market health insurance policies directly or indirectly to consumers.
• Surveyors and loss adjusters under the IA Board Resolution No. 6 of 2010 Concerning Surveyors and Loss Adjustors’ Regulations
• Insurers can outsource the surveying and investigating of the causes of damage, the loss adjustment of such damage, determining whether the damage is covered and the amount of payable compensation under the insurance policy to surveyors and loss adjusters licensed by the IA.
• Insurance Agents under the IA Board Resolution No. 8 of 2011 Instructions Concerning the Regulation of Insurance Agents Business
• An insurer can authorise an insurance agent licensed by the IA to practice its insurance business on its behalf. An agent is not authorised to act as an insurance broker nor act for more than one insurer.
• Consultants under the IA Board Resolution No. 12 of 2018 Concerning the Regulation on Licensing and Registration of Insurance Consultants and Organization of their Operations
• Insurance consultants provide services to insurers such as opining on the legal, technical and financial aspects of any insurance or reinsurance operations, study and evaluate the risks to be covered by insurance and the conditions of insurance coverage, help assess the assets and liabilities of insurers, opining on claims and study and prepare reinsurance programs. An insurance consultant cannot combine its services with any other insurance-related profession and it must be licensed by the IA.
• Actuaries under the IA Board Resolution No. 9 of 2017 Concerning the Regulations on Licensing and Registration of Actuaries and Regulation of their Operations
• Actuaries can report on an insurer’s portfolio of risks, review an insurer’s pricing policy for insurance products and the soundness of its underwriting policy, review the sufficiency of its reinsurance coverage, and the appropriateness of an insurer’s liability retention.

Outsourcing of Electronic Insurance Operations: Article 13 of the IA Board Resolution No. 18 of 2020 Concerning the Electronic Insurance Regulations deals with the Outsourcing of Electronic Insurance Operations.

Outsourcing can be split into two forms: (1) The outsourcing of the development, management, maintenance or other operations relating to the website to a third party; and (2) the outsourcing of the sale of insurance products through a website owned by a third party. With regards to (1), there is no requirement for the third party to be licensed. Instead, the parties must simply include a special provision in the outsourcing contract confirming that the third party will apply the provisions of the Regulations. With regards to (2), there is a requirement for the third party to be licensed which suggests that only licensed entities (such as insurance brokers or agents) may sell insurance products electronically on insurers’ behalf. Insurers should also be aware of the apparent prohibition on dealing with price comparison websites unless they are licensed insurance brokers.

The service providers named above are subject to the IA Code of Conduct and are required to abide by its ethical rules just as the insurers which employ them.

The Insurance Authority Board Decision No. 25 of 2014 Pertinent to Financial Regulations for Insurance Companies imposes new restrictions in relation to the domicile of investments. Insurers operating in the UAE are permitted to hold assets for UAE liabilities in a foreign jurisdiction with a sovereign rating which is better or at least equivalent to the sovereign rating of the UAE. Total invested assets held outside the UAE must not exceed 50% of the total invested assets or 100% of the total technical provisions for policies outside the UAE only (excluding unit-linked funds), whichever is greater (article 6).

Insurance products can only be sold in the UAE by insurers and insurance brokers and consultants licensed by the IA (Board of Decision No. 12 of 2018 Concerning the Regulation on Licensing and Registration of Insurance Consultants and Organization of their Operations). In addition, the sale of bancassurance is permitted in the UAE under Board of Directors Decision No. 13 of 2018 whereby there are bancassurance arrangements between a locally licensed insurer and a UAE-based bank.

In relation to policy pricing, article 5 of the Board Decision No. 3 of 2010 states that insurers must not add any excessive surcharges to the net premium or offer prices lower than the technical level, which may (i) put the insurer’s financial position at risk; (ii) expose the insured interest to loss; and/or (iii) constitute uncontrolled competition in the insurance market. It is worth noting that insurers must also abide by the insurance prices set forth by the IA in mandatory insurances required by law.

Electronic marketing

In April 2020, the IA issued Decision No. 18/2020 Concerning the Electronic Insurance Regulations (the Regulations) relating to electronic insurance and these showed the IA’s clear intent to take on an active role in the regulation of online insurance. The scope of the Regulations is wide and the definition of ‘Electronic Insurance Operations’ specifically includes not only the sale of insurance policies, the collection of premium and the handling of claims, but also the marketing of insurance policies. The Regulations impose a requirement to obtain pre-approval from the IA to practice insurance online and the IA must pre-approve the classes of insurance products intended to be sold online. There is also a requirement to establish an IT department and appoint a Communications Officer to manage online activity.

The Regulations expressly authorise brokers to deal with price comparison websites provided: a) the website is registered with the IA and, b) a copy of the agreement between the broker and the website has been provided to the IA. The Regulations also place certain restrictions on price comparison websites. For instance, they are prohibited from communicating with the customer; such communications must only come from the broker.

The Regulations also provide clarity on the lines of insurance business that can be sold online and imposes disclosure obligations on insurers selling insurance products online. In particular, the insurance company is now obliged to show the effects of cancelling the contract, and the manner in which the premium is to be refunded in the event of a cancellation. It is also notable that the Regulations reference the future introduction of regulations relating to digital licensing.

Insurance products can only be marketed in the UAE by one of the following ways (Insurance Authority Resolution No. 2 of 2009):

• Insurers licensed by the IA (that is, direct sales).
• Insurance brokers or consultants licensed by the IA.
• Banks licensed in the UAE via bancassurance arrangements between a locally licensed insurer and the bank.

In essence, absence compliance with the above requirements, such products cannot be sold directing into the UAE (nor are there any cross-GCC passporting arrangements).

The IA grants further protection to any policyholder (including consumers), whereby any arbitrary terms, breach of which would have had no effect on the cause of the incident insured against, are void.

In relation to the incorporation of terms within an insurance policy, an insurance policy must contain all of the terms and conditions that pertain to it (article 7 of the Board Resolution No. 3 of 2010). In addition, article 28 of the Insurance Law stipulates that clauses contained within the policy that exempt the insurer from liability must be written in bold characters, in a different print colour and be initialled by the insured. Failure to comply with this requirement can lead to a fine of 50,000 UAE Dirhams (Cabinet Resolution No. 7 of 2019 Concerning the Administrative Fines Imposed by the Insurance Authority).

On January 1 2017, the UAE Motor Insurance Authorities issued a new regulation (Board of Directors’ decision No. (41) of 2017) which includes specific minimum and maximum premiums which can now be charged for motor insurance. This change applies to both unified motor insurance policies against third party liability and for loss and damage. Maximum deductibles have also been enacted (Circular No (5) of 2017 concerning the compliance to the limits of the basic and ancillary Deductible on Motor Vehicle insurance policies against loss and damage).

In accordance with the Dubai Health Authority’s Law No. 11 of 2013 Concerning Health Insurance in the Emirate of Dubai, health insurance cover is fully financed by the employer. The law also states that if the insured or the insurer violates the provisions of the Law they will face a penalty of between AED500 and AED150,000. If the offence is committed again in the same year, the fine shall double to AED500,000. The Abu Dhabi Health Authority offers employees extra protection by stating that if their sponsor passes on part of the cost of the health insurance policy to them, the sponsor will be fined AED10,000 for every employee.

The IA provides policyholders also with further rights of recourse, should the insurance claim be rejected. Should a policyholder have any complaints in relation to a claim, the insurer is required to investigate each complaint within 15 days of the date of its submission. Each complainant (whether it is the insured or the beneficiary), may appeal the insurer’s decision to the IA. An insurer may be fined 50,000 UAE Dirhams if it is found to have delayed or failed to provide clarifications on the complaints.

On 15 July 2019 the IA issued Board Resolution No. (33) of 2019 Concerning the Regulation of the Committees Responsible for the Settlement and Resolution of Insurance Disputes (the IA Resolution), which entered into force in October 2019.

The IA Resolution established a Disputes Resolution Committee (DRC) which has the mandate to hear certain insurance disputes. This is mandatory before these specific insurance disputes can progress to the onshore UAE Courts.

The IA has granted extensive powers to the DRC including the power to compel the production of documentation where necessary, to seek the assistance of experts and witnesses and to adopt any alternative measures required for the settlement of disputes.

The DRC are made up of at least three persons (one chairperson and two or more members of the IA). They will all be specialised in and will have jurisdiction to hear insurance disputes of all classes and types arising from complaints made by an insured, beneficiary or an affected person who has a right to bring a dispute against an insurance company incorporated in the UAE and any foreign insurance company licensed to carry out insurance activities in the UAE through a branch or through an insurance agent. This means that any claim by an insurance company against the insured would fall outside the jurisdiction of the DRC(s).

The DRC’s are not empowered to deal with the following:

1. Urgent applications and provisional attachment orders;
2. Disputes filed with the courts before the Regulations came into effect; and
3. Disputes subject to an arbitration clause.

The IA issued Board Resolution No. (9) of 2020 on the Amendment of some provisions of the Insurance Authority Board Resolution No. (33) of 2019 dated on 12 March 2020 added to the above exceptions falling outside the jurisdiction of the DRC:

1. The exercise of subrogation rights, by insurers;
2. Claims between insurers and the adjustment of balances;
3. Claims between insurance-related professionals and insurers.

Methods of alternative dispute resolution have been well established and utilised in the UAE for many years. In April 2021 the UAE Government passed Federal Law No. 6 of 2021 On Mediation for the Settlement of Civil and Commercial Disputes. The new law brings into force a robust framework in which mediation can occur in the UAE and sets out the obligations of mediators. The new law sets out two mediation regimes, ‘judicial’ and ‘non-judicial’, and the obligations for drafting a mediation agreement. The new laws provide parties with a robust framework in which to come to agreement. Importantly, any discussions in the context of mediation are confidential (i.e. privileged).

Articles 71 and 72 of the Federal Law No. 6/2007 allow for the transfer of insurance policies/portfolios. Only companies that carry out the same type of activities are allowed to transfer their portfolio including all rights and obligations attached to the policies. An application of the transfer must be submitted to the Director General of the IA who will then publish it in the Official Gazette and two Arabic and one English-language daily papers. If no objections are received within the deadline provided the transfer takes place.

The UAE market has developed in a considerably short period of time and the classes of business and products which are written reflect business in any sophisticated market. That being said the market suffers from the cyclical nature of the insurance market; for example softening of rates caused by competition, liquidity flows in terms of remittance of insurance premiums. In addition, whilst new products are being developed in connection with “electronic/connectivity” risks globally, the penetration in the UAE market is less marked, despite there being significant and quantifiable losses.

The regulatory environment of the insurance industry is strengthening, and when coupled with increasing operating costs it is becoming difficult for smaller entrants to retain a steady level of growth and profitability. Indeed, there seems likely to be an increasing emphasis of consolidation over the next few years.

Digital innovation will impact the insurance market in many ways from policy wording to the electronic sale of policies. However, the main effects of digital innovation on the UAE insurance market are twofold.

Firstly, it will heavily influence the types of insurance products that are sold. Developments in FinTech, digital innovation and cybercrime may cause the insurance market to experience an increase in the need for cyber insurance policies in order to meet these risks. Digital innovation is therefore key to winning new business streams.

Secondly, not only will digital innovation influence the types of insurance products that are sold, but also the way in which policies are sold. As digital innovation increases, it is expected that contracts between parties can be executed electronically; for example, contracting by ‘click-to-accept’ (where an insurer indicates their consent to the insurance contract by ticking a box online), will overtake the sale of policies by physical channels.

The scope of the IA Board Resolution No. 18 of 2020 is wide and the definition of ‘Electronic Insurance Operations’ specifically includes not only the online sale of insurance policies, the collection of premium and the handling of claims, but also the marketing of insurance policies. The regulations impose a requirement to obtain pre-approval from the IA to practice insurance online and the IA must pre-approve the classes of insurance products intended to be sold online. There is also a requirement to establish an IT department and appoint a Communications Officer to manage online activity.

Those who collect and process personal data will have until 2 June 2022 to comply with the new Federal Decree-Law No. 45 of 2021 (which was announced in November 2021 and came into force from 2 January 2022). The new law is designed to protect “personal data“, which is defined as “any data related to a specific natural person or related to a natural person that can be identified directly or indirectly by linking the data“. Thus, insurers who use customer data are subject to the new law. The Federal Decree-Law No. 45 of 2021 implements regulations surrounding (i) data processing controls; (ii) consent requirements and data subject rights; (iii) data transfers; and (iv) penalties. Insurers will have to bear in mind that the processing of personal data must be limited to a specific and clear purpose. They must have technical and organisational measures in place to correct or remove incorrect personal data and the data must be protected from any data breaches or unauthorised access. Personal data should not be retained after the purpose of processing has been fulfilled. It should be noted that additional regulations are expected in order to clarify certain aspects of the law, including the scope.

The new data protection laws are to work alongside the Data Protection Law Dubai International Financial Centre Law No.5 of 2020 and Abu Dhabi Global Market’s Data Protection Regulations 2021 (which takes European GDP date protection regulations). They also do not apply to government entities or government data.

Under the new data protection laws, personal data can be transferred outside the UAE subject to the approval of the UAE Data Office, a new national data privacy regulator. The Data Office will look at the protection given to the personal data and the rights of the data in the jurisdiction where the personal data is to be transferred. Data can be transferred to jurisdictions which do not have data protection laws if the parties within the UAE and the parties within those jurisdictions have an agreement in place which requires the parties in the foreign jurisdiction to apply the UAE’s data protection laws. This includes imposing measures on the processor and controller via a competent authority in that jurisdiction.

In 2020, the Securities and Commodities Agency (SCA) issued Decision No. 3/2000 Concerning Adaptation of the Governance Code (the Governance Code). Under article 76 of the Governance Code, public joint stock companies listed on the Dubai Financial Markets (DFM) and the Abu Dhabi Securities Exchange (ADX) must publish a sustainability report. A clarification of article 76 of the Governance Code was published in 2021 and provides more detail as to what is to be included in the report and confirmed that the report must be published on an annual basis. Both DFM and ADX have published guidance to assist companies in their sustainability reporting. For example, reports must include commentary on the company’s environmental, society and governance practices and must set out the company’s long-term strategy in these three areas.

As businesses recover from the rapid global spread of the COVID-19, the outlook within the insurance market is changing on a daily basis, there has been escalation, resulting in insurance implications across multiple lines: business interruption, health, life, workers compensation, travel and trade credit to name but a few. The slight marginal growth in premium in the UAE insurance market in 2020 was mainly due to higher volume of the new business written in the first half of year 1. Over the next five years, as the remaining Emirates, including Ajman and Sharjah, follow suit and implement the requirements for mandatory health insurance we may witness exponential growth across the UAE for health insurance and life insurance.