Insurance Authority stated that it chose the best method for insurance policy pricing, by setting a minimum limit of pricing protecting the market from the burning of prices that lasted over the past years and caused great losses to the companies and affected the rights of policyholders, and then set an upper limit for the price that shall not be exceeded by the companies, noting that if any transgression of the pricing limit is committed by the companies, they will be exposed to accountability and punishment.
During a workshop held in Abu Dhabi on the Regulation of the Unified Motor Vehicle Insurance Policies, the Insurance Authority stated that the previous price was set more than 30 years and had to be modified, urging policyholders to resort to the Insurance Authority to lodge a complaint in case of being exposed to any exaggeration in prices, which are decided in their complaints within two working days.
In detail, Ibrahim Al Zaabi, Director General of the Insurance Authority, said that: “Tariff prices contained in the new Regulation of the Unified Motor Vehicle Insurance Policies, which came into effect from the beginning of January, represents the upper and lower limits to be considered», and added that «insurers may directionally compete each other by offering prices, according to the company's experience with the customer or any technical or actuarial reasons, to the extent that same shall neither expose the company’s financial position to risk nor lead to the loss of the insured’s rights.”
During a workshop held by the Insurance Authority in Abu Dhabi, on the new Regulation, the day before yesterday, Al Zaabi added that the Insurance Authority has two options in relation to the two insurance policies pricing (comprehensive and against third parties), clarifying that the first option is the liberalization of prices. Thus, the pricing is made by the insurance company for both types of insurance (two insurance policies).
He stated that the second option focuses on setting a binding prices tariff, pointing out that this option involves several hypotheses, including a prices tariff with one binding limit and a prices tariff with one limit that is considered an upper limit, and companies can get off the limit without bypassing it, as well as the prices tariff with one limit that is considered a minimum limit and companies can bypass the limit without any ceiling, as well as a double-edged tariff prices, maximum and minimum.
“ In correction of the status quo, the new pricing of vehicle third party liability insurance policies is based on actuarial and statistical study related to previous risks, and analysis of the risks that may arise in the future as a result of the imposition of new coverage and their relativeness to the expected risks in the future.” Al Zaabi added
“The results of the study recommended that the insurance premium shall be set at the maximum limit that has been set in the new rates, but that the Insurance Authority, in order to promote the sound competitiveness among the insurance based on sound technical grounds in the underwriting and to protect the insureds holding clean register, believes that it shall apply the minimum price to prevent companies insurance from adopting the burning of price policy that may expose the company to financial losses in the future, and thus affect its ability to meet its obligations towards policyholders and beneficiaries.” Al Zaabi asserted
“The Insurance Authority obliged the companies not to exceed the maximum price in a manner that ensures the protection of the insured from companies’ exaggeration and ensures the profit margin for companies. Any exaggeration from the pricing will expose the companies to accountability and punishment.” Al Zaabi added
“Based on the new benefits included in the two new insurance policies, and due to the lack of revision in prices set for more than 30 years, it has become necessary to reconsider the prices tariff.” Al Zaabi confirmed
He called upon policyholders to resort to the Insurance Authority for filing complaints in the event of exposure to any exaggeration in prices, and such complaints shall be considered within two working days; and affirmed that the Insurance Authority would intensify inspection campaigns on c