The IA granted all the insurance brokers operating in the State three months grace period to adjust their status in respect of opening independent bank accounts to settle the insurance companies’ dues according to a statement by H.E FMIA DDG of the IA.
Al-Awadi assured to Al-Ittihad newspaper that the IA received no clear statement from the registered brokerage companies in respect of opening bank accounts for the premium due from insurance companies despite the Regulation issued by the IA in this aspect on April 12, last month.
She stressed on necessity to haste in adjusting the brokers status and informs the IA of the implementation mechanism, indicating that the IA will take fatal procedure after the expiry of the grace period to verify the brokers compliance with IA’s resolution.
These last procedures made by the IA comes at the time that reliable sources in the insurance sector estimated the amount dues from the insurance companies operating in the State between AED 300 – 500 Million.
The IA asked all insurance brokers registered to operate in the State to abide by depositing premium amounts collected from the clients in favor of the insurance companies in special account to be opened at one of the banks and stressed that the said account to be exclusively for depositing the funds emerging from the premiums only. The IA required the brokers to be obliged to open another account for the broker to deposit his monies and has nothing to do with the collected premiums from insurance operations.
Financial and Administrative Penalties:
Al-Awadi said that the insurance companies suffering from accumulations of their due with the insurance brokers should place their petitions to the IA, the authority having the sufficient mechanism and powers to impose financial and administrative penalties on the violating companies.
Al-Awadi assured that the IA will review statements of accounts of the insurance brokerage companies to ensure that the accounts of the brokerage companies are separated from the accounts and dues of the insurance companies, indicating that these procedures come in order to safe keep public interest and secure good relation between the insurance brokers and the insurance companies which will have its reflection on the rights of the policyholders.
The numbers of the insurance companies operating in the State 52 companies which the number of the approved insurance brokers 135 brokers, a number as assured by Tawfiq Al-Qadoomi, Chairman of the Technical Committee of EIA exceeds the size of the local market demand and the operations available for brokerage in the local market.