The UAE is set to implement new insurance regulations that will bring significant changes to how payments, claims, and commissions are handled in the sector. Starting February 15, policyholders will benefit from direct payments to insurers, ensuring faster claims processing and reducing risks of delays or mismanagement. These changes aim to prioritize efficiency and transparency in the insurance industry.

Speaking to Khaleej Times, Avinash Babur, CEO of Insurancemarket.ae, noted that brokers are actively adapting their operations to align with the new rules. He explained that the regulation shift removes financial risks associated with premium handling, enabling brokers to focus on advisory roles rather than administrative tasks. Additionally, insurers will be required to settle broker commissions within ten days of transactions, ensuring better financial stability for brokers.

Toshita Chauhan, business head at Policybazaar.ae, highlighted that the new rules will also impact insurance sales through online platforms and third-party brokers. She mentioned that local employment is likely to increase as the reliance on offshore services diminishes.

Under the updated guidelines, brokers are prohibited from offering discounts by reducing their commissions, a practice that previously encouraged competition based on pricing rather than service quality. Babur emphasized that this change will encourage higher professional standards and foster sustainable growth in the sector. Customers will now choose brokers based on advice and service quality rather than cost alone.

The Central Bank of the UAE (CBUAE) has also introduced stricter oversight on outsourcing brokerage activities. Core functions must remain under the control of licensed entities to enhance accountability, data security, and service quality. Additionally, brokers will no longer be allowed to enter financial arrangements with non-insurance entities for client referrals, ensuring policy distribution is handled by licensed professionals.

Another significant update requires locally incorporated brokers and overseas branches to maintain a minimum capital in addition to a bank guarantee. Chauhan explained that this could strain smaller brokers financially, potentially leading to market consolidation in the short term.

The new regulations also emphasize data protection, requiring personal data to be stored locally in the UAE with a secure backup for at least ten years. Chauhan noted that the Central Bank is adopting a proportional approach, allowing discussions for brokers facing challenges with specific requirements.

These changes mark a major step forward in ensuring transparency, efficiency, and accountability in the UAE’s insurance sector.