Zaabi: the Insurance Authority seeks to issue two advanced policies consistent
with the international standards and the global competitive level of the
Boosting the approach of engaging the
private sector in amending the two polices to serve the interests of the market
and the parties of the insurance relationship.
Motor insurance premiums grew by 16.7% up
to AED 5.6 billion in 2014.
Abu Dhabi, March 30, 2015
Insurance Authority (IA) organized a discussion session for the national and
foreign insurance companies operating in the UAE to examine the draft
amendments to the two unified motor insurance policies.
The session was attended by representatives of the Emirates Insurance
Association, companies’ managers, experts, and specialists of the insurance sector.
session, which was held in Abu Dhabi, comes as part of the IA’s approach and
continuous commitment to engage the insurance companies and specialists and to
exchange views and ideas with the private sector to develop the draft laws and
regulations in order to achieve the maximum level possible of meeting the
requirements and views of the related parties, in a manner consistent with the
applicable international standards and the global competitive level of the
the opening of the discussion session, H.E. Ebrahim Obaid Al Zaabi, Director
General of the IA, said that the two unified motor insurance policies represent an important
insurance issue because they are related to the day-to-day activity of the
insurance companies. He confirmed that
motor insurance issue takes up a major space of the business of insurance
companies and the activity of the insurance market in general.
pointed out that motor insurance premiums increased during the past years, with
a growth rate of 30.7 percent between 2010 and 2014. In 2014, motor insurance premiums grow by 16.7
percent, with a reported estimated value of AE 5.6 billion accounting for 22.6 percent
of the general insurance premiums. The share of national insurance companies in
such premiums amounted to nearly 70 percent while the share of foreign companies
amounted to nearly 30 percent.
added that the complaints related to motor insurance amount to over (90)
percent of total complaints submitted to the IA from the policyholders, which
amount to nearly (3000) complaints a year, including complaints related to the road
concept, concept of floods, the market value of the vehicle, or driving license
expiry…etc. He affirmed it is important that the two unified motor insurance policies handle such issues.
The IA’s Director General explained that the above issues
and others drove the IA to hold this discussion session with the companies to
reconsider the policy applicable currently which was issued in 1987, in order
to come out with two advanced policies that avoid the problems and clarify some
of the items stated in the policy, in consistency with the development and
growth seen in the insurance sector and the national economy.
added the organization of this discussion session with customers by the IA
confirms its commitment to continue boosting its approach in dialogue and
exchange of views and ideas with the insurance companies operating in the UAE
regarding everything that leads to developing the insurance sector and boosting
the fair and effective competition, as well as provision of the best insurance
services to protect the national economy and boost its growth and development.
Al Zaabi asserted that the IA, which regulates and supervises the insurance
sector as per the Federal Law establishing the IA, has a responsibility to
amend the two motor insurance policies and to accomplish this mission toward
issuing two new and advanced policies, so that amendments are based to the best
international practices that serve the best interests of both insurance relationship
parties (insurer and insured), considering that the insurance policy is deemed
a contract which is basically founded on a statement of the rights,
obligations, coverage, and exceptions.
pointed out the meetings held recently between the IA and the Emirates
Insurance Association and its technical and legal committee, which addressed
many issues and many of the items and provisions stated in the draft amendments
of both policies.
Al Zaabi said: “The IA realizes what is related to the writing policy of the companies
and the importance of ensuring that insurance rate is appropriate at the level
of general performance of the insurance portfolio, in addition to the
individual performance of each policy. This confirms the importance of
reconsidering the calculation of premiums by the IA and in consultation with
the companies so that they are appropriate with the nature of coverage and exceptions.
added that standardizing the compulsory civil liability insurance policy against
vehicle accidents, according to a law or based on the federal law establishing
the IA, empowers this policy before the judicial bodies. At the same time, he
indicated the importance of working in the present time to produce both
policies in a new format that avoids all differences in terms of construction or
adoption and limits the complaints submitted in relation to these two policies
in a manner that meets the aspired expectations largely.
said he hopes the session comes up with objective suggestions and fruitful
results to support the regulatory rules of the sector, protect the rights of
insurance customers, boost the stability of the local insurance market, and
increase its regional and international competitiveness. He indicated that the
IA is interested in the opinions and constructive remarks of the companies
regarding the proposed two policies, as the IA will consider them when it
develops the draft amendments to both policies.
turn, in their paper presented during the session, the national ambulance
officials explained the decision number 24/2014 concerning the addition of
ambulance services to the risks covered in the form of the vehicle insurance
policy covering civil liability and in chapter 2 of the form of vehicle
insurance policy against loss and damage and civil liability, while the
insurance company will pay a sum of
money to service providers of hospitals for each injury or death for an additional
premium to be determined by the insurance company at AED50 maximum.
officials reviewed mechanisms of implementing this decision whereas every traffic
accident will have one financial claim for each vehicle causing the accident.
The claim should list the number of injured people transferred to the hospital.
The insurance company that covers the vehicle that caused the accident will pay
the value set for each injured person taken to the hospital.
the discussion session about the draft amendments to the vehicle insurance
unified policies against loss, damage, and civil liability issued as per the
provisions of Ministerial Decision number (54) of 1987 started.
4-hour session saw extensive dialogue and discussions among the IA, companies’
managers, and specialists on the overall items of both policies, especially in
terms of the regulating provisions and the current gaps and deficiencies in
both policies. Such discussions will positively reflect on the final draft
amendments to both policies in a manner that will serve the best interests of
the local market and national economy and meet the requirements of all parties,
especially policyholders and the companies, based on the best international standards
and practices applicable in the insurance sector.
the session, the IA officials responded to the questions and inquire of the
national and foreign insurance companies and specialists regarding the proposed
terms in the draft amendments of both policies.
their part, the managers and representative of the insurance companies
participating in the session extended thanks and appreciation to the IA, which
gave them such opportunity to discuss the draft amendments to the two vehicle
participants commended the IA's vision about the draft amendments and its
commitment to develop both policies to achieve the aspirations and best
interests of all parties of the insurance process and in consistency with the
increasing growth seen in the UAE insurance market and national economy.
unified motor insurance policy against loss, damage, and civil liability
consists of two chapters. The first chapter is related to loss and damage and
in this case, the insurance company indemnifies the insured against loss and
damage of the insured vehicle along with its accessories and spare parts when
they are attached to the vehicle. This includes many cases arising from loss or
damage such as crash, rollover, accident, emergency mechanical failure, or wear
of parts because of consumption. Further, loss or damage may arise from fire,
external explosion, spontaneous combusting, robbery, theft, willful act from a
third party, or in the course of land or maritime transport.
policy includes some cases that are excluded from the loss and damage
provisions where the company is not liable to pay any compensation for indirect
loss sustained by the insured or the failure, defect, or crushing of the
mechanical or electric devices. Exceptions include the damage arising from
overload or the overload of passengers, provided that overload in both cases is
the cause of accident. Exceptions also include damage occurring to the tires or
the vehicles arising from the accidents caused by use in purposes other than
the specified ones.
include the damage occurring to the vehicles due to the accidents that take
place during the driving of the vehicle by an unlicensed driver or if the
license granted was suspended by a decision made by the competent authorities.
Exceptions also include the loss or damage arising from the accidents that take
place during driving of the vehicle under the influence of psychotropic
Chapter 2 is related to the civil liability
policy. In case of an accident arising from the use of the insured vehicle, the
company is liable to indemnify the insured, within the limits of its liability
stated in the policy, for all the amounts legally due on the insured as
compensation for the death or any physical injury sustained by any individual,
including the vehicle passengers, as well as the damage to items and property under
specific exceptions. Moreover, the policy includes some general exceptions that
are covered by this type of insurance.