The IA warned insurance companies operating in the State because they delt with unlicensed brokers in violation of the Federal Law No. (6) of 2007 on the establishment of Insurance Authority and organization of the sector according to Statement of H.E. FATMIA, DDG of the IA.
Al-Awadi said to Al-Itihad newspaper that the IA discovered these insurance brokers trying to circumvent the IA’s law by obtaining licenses to conduct brokerage from the economic department in a number of UAE’s Emirates.
The DDG of the IA warned the Companies not to deal with individuals or bodies unlicensed to conduct brokerage profession. She indicated that dealing with these bodies will make these companies liable to law and expose them to direct administrative and financial penalties according to the powers endowed on the IA which enable it to impose penalties that extend up to final writing off the IA’s register.
Al-Awadi assured that due to dangers of these prohibited practices and their negative implications on the insurance sector, the IA served a warning on the violating companies which the IA’s discovered that they are dealing with unlicensed insurance brokers in order to impose financial and administrative penalties on them in case they repeated the same violation. She indicated that the IA is heavily embarking upon these unlegal practices in order to maintain capabilities and gains of the insurance sector and both the shareholders and policyholders rights.
Whether these companies go for these unlicensed brokers due to challenges of less demand of insurance products following the international financial crisis, Al-Awadi stressed that it's unacceptable the companies uses the financial crisis as pretext to justify these unlegal practices.
She affirmed that the serious insurance companies succeeded during the apex of the crisis to generate demand on its products by offering new ideas able to attract clients without any violations of the laws and rules organizing the sector.
She stressed on the importance of the insurance companies compliance with the IA’s instructions not to deal with brokers or individuals only after ascertaining that they obtained the necessary licenses issued by the IA in addition to reviewing validity of the registration certificate or the registration renewal.
She indicated that the IA is exerting every effort to organize UAE insurance sector and protect the rights of the policyholder, insurance companies, insurance brokers, and loss adjustors who acquired the necessary licenses from IA and affirmed that the IA will not permit such disregards in view of their negative implications on the insurance sector.
In the same context, Al-Awadi indicated that the IA agreed with all the local economic directorates in UAE not to license or register a trade license of insurance brokers “unlicensed” or “written off the register of the IA following the IA’s discovery of these written off brokerage companies while trying to circumvent the law by renewing their trade licenses at the economic directorates in a number of UAE’s Emirates.
Al-Awadi assured that the local economic directorates in the State closely cooperated with the IA to prevent attempts to circumvent the Federal Laws organizing the insurance sector which limit the right on carrying out insurance brokerage operation to the companies registered in the IA’s register.
The number of the insurance companies operating in the State amount to 57 companies whiles the approved insurance brokers amount to 135 brokers. The consolidated profits of 26 national insurance companies registered in the Stocks & Securities Market scored 2% increase during the first quarter of the present year reaching AED 4446.9 million as compared to AED438 million during the same period last year.