Wednesday, October 12, 2011

His Excellency Eng. Sultan Bin Saeed Al-Mansouri, Minister of Economy and Chairman of the Board of Directors of the Insurance Authority, asserted that the energy insurance, especially of nuclear power centers, is an important issue for the countries that established or tended to establish nuclear power centers for peaceful purposes.

This was stated as part of his speech in the opening of the forum of the Co-ordination Commission for Gulf Insurance & Reinsurance Companies held at Abu Dhabi today which was given on his behalf by H.E. Fatima Mohammed Ishaq Al Awadi, Deputy Director General of the IA, in the presence of many insurance experts from the Gulf, Arab, European, and Asian countries in addition to a selection of researchers and underwriters of the alternative energy insurance of the leading international insurance companies and the global nuclear power insurance pool.

He said that the Arab Gulf region looks attentively at the insurance experiences adopted by some of the European and American countries concerning the provision of insurance coverage for such risks of special nature.

He explained that in view of the disastrous feature of the nuclear risks, such risks are treated in the insurance aspect through the formation of polls. He indicated that the insurance aspects addressed by the Forum gain a special and increasing importance due to the participants' experience and competence in this area. 

He reviewed some of the new legal regulations adopted by the IA in the UAE which could form a foundation for a common insurance legal regulation at the Gulf level, referring to three models; the regulations pertaining to Takaful insurance, the rules of insurance policy marketing by the banks, and the organization of the operations of health insurance claims management companies.

He explained that the IA issued Takaful insurance regulations number 4 of 2010 which is the first of its kind at the Arab level and one of the most comprehensive regulations at the Islamic level. When these regulations were issued, they adopted Shariah-compatible rules and stipulated that Takaful insurance must be practiced by specialized insurance companies. In other words, the regulations did not allow the traditional insurance companies to practice Takaful insurance through an “Islamic Counter”. Moreover, the relationship between the subscribers/ the insured/ and Takaful insurance companies was established on the basis of Wakala or Wakala and Mudarabah combined based on the best Islamic legal opinions.

He added that pursuant to the regulations, the shareholders’ fund was obliged to provide a goodwill loan to the subscribers’ fund with a maximum limit equaling the total of shareholders’ rights to protect the subscribers. The regulations also stated that subscribers may be invited to attend the general meetings of the shareholders and they gave the subscribers the right of discussion although they do not have the voting right. In addition, the regulations introduced a Supreme Fatwa and Shariah Control Committee in line of the IA in addition to the Shariah Control committees at the level of the companies and they obliged the companies to create a Zakat Fund at the level of the companies. Further, the regulations included many other organizational provisions.

The Minister of Economy affirmed that the UAE regulations pertaining to the Takaful insurance are valid in principle to form a platform for a unified Gulf regulation.

He said the rules for the marketing of insurance policies by the banks were prepared and that he hopes the pertaining instructions will be issued during the present year.

He explained that while the experiences of the developed countries are reviewed, the IA has adopted rules and provisions compatible with the economic, financial, and legal environment of the UAE which is almost similar to that of the Arab Gulf regions. He said “We believe that the UAE regulation is valid to serve as the foundation for a common Gulf insurance regulation”.

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ansouri said that the relationship between the bank and the insurance company pursuant to the UAE regulations is a mere marketing relationship that does not lead the bank to act as an insurance agent, broker, or consultant, which serves the best interest of all three parties to such transactions; namely the insured, the bank clients, the bank itself and the insurance company.

He noted the importance of this principle when the insured risk occurs or when the insurance company refuses to admit its responsibility for any valid legal reason. He affirmed that the regulations determined certain types and classes of insurance operations that can be transacted with the bank, and where the bank may not market insurance policies to persons other than its clients and where it is impermissible to authorize the bank with the power to issue insurance policies, settle claims, or pay compensations.

Pertaining to the organization of the operations of companies of health insurance claim management, He explained that the IA issued instructions number 9 of 2011 as to the organization of the operations of such companies. Within the framework of such instructions, rules were set to protect the best interest of all relevant parties, namely, the insured/recipients of health services, hospitals, physicians, and the insurance companies.

He added that such regulations include many other provisions aiming at organizing the relationship from the legal and financial aspects. He noted that in view of the Gulf directions toward making health insurance a part of the compulsory insurances, the organization of such important aspects of the health insurance operations gains a special importance.

He said he hopes that such models of the legal regulations become a part of the agenda of the Co-ordination Commission for Gulf Insurance & Reinsurance Companies when it adopts a direction toward the actual coordination and targeted standardization in the organization of the insurance operations at the Gulf level.

On his part, Eng. Saleh bin Rashed Al-Zaheri, President of the Executive Council of the Co-ordination Commission for Gulf Insurance & Reinsurance Companies affirmed the importance of the united action between the Arab Gulf states to organize Gulf insurance laws that contribute to handling the various challenges facing the insurance sector at the regional and international levels.

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-Zaheri noted that it is important for the Gulf insurance companies to keep up with the economic updates and technological and technical developments, including the global trend toward the peaceful nuclear energy to secure demand on the electrical energy.

Mr. Abdel Khaleq Raouf, Secretary-General of the General Arab Insurance Federation gave a speech that concentrated on the developments seen in the Arab insurance markets and their contribution to boosting the economic growth in the Arab countries.

The Forum organized by the Co-ordination Commission for Gulf Insurance & Reinsurance Companies in cooperation with Emirates Insurance Association under the patronage of H. E. Eng. Sultan Bin Saeed Al-Mansouri, Minister of Economy and Chairman of the Board of Directors of the Insurance Authority, includes many two-day seminars which address many important technical and insurance issues and their influence on the insurance industry, including finding solutions for the financing of operational risks of the available nuclear energy, reaching a peaceful nuclear energy program, developing solutions for alternative energy, seeking to help the clients in the region and providing them with solutions for the financing risks, and partnering to manage and alleviate such risks.

Further, the light will be shed on the alternative energies and their different types, especially the nuclear energy. Moreover, some of the international experiences and researches in renewable nuclear energy will be reviewed.​