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Insurance Authority Board of Directors’ Decision No. (27) of 2020 on the Instructions for Licensing the Insurance Producers

The Chairman of the Board of Directors of the Insurance Authority,

• Having perused the Federal Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority and Organization of insurance Operations, as amended, and the Executive Regulations thereof;
• The Federal Law No. (2) of 2015 On Commercial Companies, as amended,
• The Cabinet Resolution No. (7) of 2019 Concerning the Administrative Penalties Imposed by the Insurance Authority,
• The Board of Directors’ Decision No. (3) of 2010, Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies and the Associated Professions Operating in the UAE, as amended,
• The Chairman of the Board of Directors’ Decision No. (15) of 2014 Concerning the Data and Information Included in the Register of Insurance Companies and the Associated Professions;
• The Insurance Authority Board of Directors’ Decision No. (12) of 2016 Concerning the Elapse of Impact of the Disciplinary Sanctions imposed on Insurance-Related Professions;
• The Insurance Authority Board of Directors Decision No. (18) of 2020 Concerning the Electronic Insurance Regulations;
• At the approval of the Board of Directors of the Insurance Authority and the proposal of the Director General of the Authority;

Has resolved as follows:

Definitions

Article (1)

The following expressions and words shall have the meanings indicated opposite to each of them unless the context provides otherwise:

State: The United Arab Emirates.

Law: The Federal Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority and Organization of insurance Operations, as amended.

Executive Regulations: The executive regulations of the law.

Authority: The Insurance Authority.

Board: The Authority’s Board of Directors.

Director General: The Director General of the Authority.

Company: The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch or through an insurance agent. This includes takaful insurance.

Customer: The person who deals with the Insurance Producer in accordance with the provisions of these Instructions.

Insurance Policy: The insurance document (policy) concluded between the insurer and the insured that includes the terms of the contract between the two parties, their obligations and rights, or the rights of the beneficiary from the insurance and any rider to such policy.

Insurance Producer: A natural or legal person licensed by the Authority to carry out the profession of marketing insurance policies through conventional or electronic means and who is registered in the Register.

Register: The Producer of Insurance Producers with the Authority.

Electronic Means: The smart electronic services or other services approved by the Authority.

Competent Authorities: Governmental bodies concerned with the oversight over the works specified in their establishment laws.

General Provisions

Article (2)

1. The provisions of these Instructions shall apply to all Insurance Producers operating in the State.
2. No person may carry out the activity of an Insurance Producer in the State unless he is licensed by the Authority and registered in the Register. The license shall be renewed annually in accordance with the provisions of these Instructions.
3. No company may be permitted to deal with an Insurance Producer who is not licensed and registered in the Register with the Authority.

Nature of the Insurance Producer’s Business

Article (3)

1. The activity of the Insurance Producer shall be limited to marketing the Insurance Policies by attracting natural or legal persons to introduce them to the Company, the insurance services and products it provides and the offers it prepares, using conventional or electronic means by posting a hyperlink to the company for which they work on their electronic account or their addresses on social media networks, multimedia sharing networks, collaboration applications and smart applications, exclusively so that the insurance seekers electronically proceed to the website of the company or agent.
2. The Insurance Producer who is a citizen of the State may market the Insurance Policies in all types and classes of insurance.
3. An Insurance Producer who is not a citizen of the State may market the motor vehicle Insurance Policies and medical Insurance Policies. The Director General may make an exception by permitting the marketing of other types and classes of insurance.
4. An Insurance Producer may not engage in the business of insurance agent, insurance broker, or any of the insurance-related professions.
5. The Insurance Producer may not work for an insurance broker.
6. The Insurance Producer may not deal with more than one insurance company.
7. The Insurance Producer shall have the right to work for the Company or for an insurance agent, provided that the insurance agent shall obtain the approval of the principal company for contracting with the Insurance Producer.
8. In carrying out the advertising, promotion and marketing of electronic or conventional insurance operations, the Insurance Producer shall comply with the provisions of Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies Operating in the UAE, as amended.

Licensing and Registration Prerequisites

Article (4)

First: The following prerequisites shall be satisfied in respect of the licensing and registration of a (natural) Insurance Producer:

1. He shall be of full capacity, and that he shall not be less than eighteen years old.
2. He shall be a natural person who is a citizen of the State or a natural person who is resident but not a citizen of the State and fulfills the conditions specified by the concerned authorities.
3. He shall hold any of the following qualifications as a minimum:
   1. For the citizens of the State, a high school certificate, in addition to a course in insurance principles of not less than two weeks’ duration.
4. For non-citizens of the State, a university degree, in addition to a course in insurance principles of not less than two weeks’ duration.
5. He shall be of a good conduct and behavior, and shall have not been previously sentenced to a freedom-restricting penalty for a crime involving moral turpitude or dishonesty without being rehabilitated.
6. His license to practice any of the insurance-related professions shall have not been previously canceled during the previous five years.
7. He shall successfully pass the assessment made by the Authority for the applicants for licensing and registration in the Register, with the exception of holders of professional insurance certificates.
8. The Insurance Producer, before or after obtaining the license, shall not be a member of the Company’s board of directors, general manager, employee an authorized director of the company, in order to avoid conflict of interests.
9. A copy of the contract concluded between the applicant and the Company shall be presented.

Second: The following prerequisites shall be satisfied in respect of the licensing and registration of a (legal) Insurance Producer:

1. It shall be a commercial company duly licensed in the State, or licensed in a financial free zone.
2. Its objects shall include the marketing of insurance products.
3. It shall present a non-objection letter from the entity from which it obtained its professional license, to carry out the profession of Insurance Producer.

Licensing and Registration Application

Article (5)

First: The application for licensing and registration in the Register shall be submitted in respect of the natural person to the Authority in accordance with the Electronic Means or other approved means. It shall include the following information and supporting documents:

1. The name of the applicant for the license, his nationality, address and place of residence.
2. A copy of the Emirates ID or a copy of the passport including a valid residence visa.
3. The name of the insurance company for which he will work, and the types and classes of insurance for which production is to be exercised.
4. A valid certificate of good conduct issued by the Competent Authorities.
5. A copy of the academic qualifications equivalency issued by the Competent Authorities in the State.
6. A copy of the training course certificate obtained.
7. A letter from the insurance company including the Company’s approval to approve the applicant as an Insurance Producer for it in the event that the Authority’s licensing procedures are completed.
8. An undertaking to comply with all laws, legislations, regulations, instructions and decisions issued by the Authority.
9. An undertaking to fulfill all the required licensing conditions in case the application is approved during the period stipulated in Clause (1) of Article (6) and not to commence carrying out the activity before the Authority verifies that all licensing conditions have been met, and it issues its approval in this regard.
10. Any such documents, information or other documentation as may be requested by the Authority.

Second: The application for licensing and registration in the Register shall be submitted in respect of the legal person to the Authority in accordance with the Electronic Means or other approved means. It shall include the following information and supporting documents:

1. A certified copy of the company’s articles and memorandum of association.
2. A certified copy of the legal person’s license.
3. A letter of non-objection from the licensing entity.
4. Any such documents, information or other documentation as may be requested by the Authority.

Considering the License and Registration Application

Article (6)

1. The Director General shall issue his decision to approve or reject the application for licensing and registration within a period of no more than (15) business days from the date of submitting the application in compliance with the established conditions and requirements.
2. In case the licensing application is approved, the registration the shall be entered into the Register maintained with the Authority.
3. The applicant for licensing shall be granted a document indicating that he is permitted to carry out the activity of Insurance Producer as per the form approved for this purpose.
4. The Company shall be fully responsible for the actions of the Insurance Producer related to the insurance activity towards third parties. It shall provide the Authority with an undertaking in writing to that effect. The Insurance Producer may not be granted the license or its license may not be renewed unless a copy of such undertaking is provided to the Authority.

Duration and Renewal of the License

Article (7)

1. The duration of the license is one year ending at the end of December of each year. The duration of the first license shall be considered from the date of issuance until the end of December of the same year.
2. An application for renewal shall be submitted thirty days before the date of expiry of the registration period through the Electronic Means made for this purpose or other means adopted by the Authority.
3. The Authority shall be provided with an approved statement issued by the Company on the businesses that he carried out for the Company and the sums paid to him for his services.
4. After verifying the Insurance Producer’s continued compliance with the provisions of these Instructions, the Director General shall issue its decision on the application within (10) business days from the date of the complete submission.

Temporary and Permanent Suspension

Article (8)

1. An Insurance Producer, who wishes to temporarily suspend exercising his activity or who has a contingent reason preventing him from practicing his activity, shall submit an application to the Authority through the Electronic Means made for this purpose or other means adopted by the Authority for temporary suspension of the performance of his duties. The period of such suspension may not exceed three months, extendable to another similar period.
2. An Insurance Producer may not carry out his activities during the suspension period. In all cases he shall have the right to submit an application to resume the performance of his activity before the end of the specified period, whether the suspension was voluntary or attributed to reasons that have ended.
3. An Insurance Producer, who wishes to permanently cease exercising his activities, shall submit an application to this effect to the Authority through the Electronic Means made for this purpose or other means adopted by the Authority. The Authority shall issue its decision in this regard after consulting the opinion of the Company for which it produces.

Functions of the Insurance Producer

Article (9)

1. The Insurance Producer shall perform the functions of marketing between the company and the customer, so that the customer obtains insurance coverage.
2. The Insurance Producer shall not be entitled to fill in or sign the insurance application on behalf of the customer. The Insurance Producer shall neither be entitled to receive the insurance premiums due to the Company, nor be entitled to receive the compensation due to the customer for the purpose of paying the same to him.
3. The Insurance Producer shall not be entitled to issue an insurance policy on behalf of the Company or to issue an insurance certificate. The Insurance Producer shall not be entitled interfere in the issue of claims that the customer submits to the Company.
4. The Insurance Producer is entitled to receive a commission from the Company in consideration of his production according to the agreement between the two parties as soon as the insurance policy is issued. An agreement shall be made between him and the Company regarding the method and term of payment.
5. The Insurance Producer is not entitled to receive any commission, reward, or consideration whatsoever from the customer.
6. The Insurance Producer shall carry out the marketing activities by himself. The Insurance Producer may not assign another person to carry out the Insurance Producer activity.
7. It is prohibited for the Insurance Producer to transfer from one insurance company to another insurance company except after providing the Authority with the following:
8. A clearance certificate from the previous insurance company.
9. A letter from the new insurance company including the company’s approval to approve him as an Insurance Producer.
10. A letter from the insurance company for which he worked stating that the contract between them has been terminated.
11. An undertaking from the new insurance company in accordance with the provisions of Clause (4) of Article (6) of these Instructions.
12. An Insurance Producer may not directly or indirectly, leak insurances that he had previously marketed for the insurance company for which he was working, to the new insurance company.

The relationship of the Insurance Producer with the Company

Article (10)

1. The relationship between the Company and the Insurance Producer shall be regulated by virtue of a contract to be concluded between the two parties and which shall be subject to the approval of the Authority. The amount of commission that the Insurance Producer will receive in consideration for his work for the Company shall be determined therein.
2. The relationship of the Insurance Producer with the company shall be for marketing for the Company’s products only. It may not be considered a relationship of agency, brokerage, or any other insurance-related profession.
3. The insurance company shall assume the liability of the Insurance Producer for exercising its activity in accordance with the provisions of these Instructions.

Violations and Penalties

Article (11)

1. Penalties and procedures shall be applied to the Insurance Producer according to the following:

1. Violation of the laws, regulations, instructions or decisions issued by the Authority.
2. Failure to perform his duties as legally and/or professionally required.
3. Loss of any one of the conditions based on which the license was granted.
4. Failure to make an application to renew his license in accordance with the provisions of Article (7) of these Instructions.
5. In In the event any of the violations listed in Paragraph (1) of this Article is substantiated with evidence satisfactory to the Authority, the Director General shall have the right to apply any of the following procedures and penalties:

1. Serving a warning notice upon the Insurance Producer and requiring him to take appropriate measures to rectify his position within a specific period of time.
2. Suspending the registration of the Insurance Producer for a period no more than six months in cooperation with the Competent Authorities, and in case he repeats the violation, the period of suspension shall be doubled, along with notifying the general public through a notice to be published by the Authority on its website, or any other means, and informing all insurance companies of the decision.
3. In case of failure to rectify his position within the specific period, the decision to cancel the license shall be taken, and all insurance companies the insurance agent and the Competent Authorities shall be notified of such decision. Also, the general public shall be advised through a notice to be published by the Authority on its website.
4. In the event the Insurance Producer’s license is cancelled pursuant to the provision of this Article, the Insurance Producer may not submit a new application for license before the lapse of two years from the date of issue of the cancellation decision.
5. Websites that exercise Insurance Producers’ business activity in the State without obtaining the necessary license from the Authority shall be blocked in coordination with the Competent Authorities in the State.

Complaints

Article (12)

It is permissible to appeal against the decision issued by the Authority in the event of canceling the license and striking off the Register within (30) days from the date of being notified of the decision. The complaint shall be submitted to the Board for decision within 60 business days from the date of submitting the complete complaint. The Board’s decision in this regard shall be considered final.

Final Provisions

Article (13)

Everyone who practices the profession of Insurance Producer shall rectify his position in accordance with the provisions of these Instructions within three months from the date on which these Instructions enter into force.

Article (14)

The Director General shall issue the decisions and circulars necessary to implement the provisions of these Insstructions.

Article (15)

This Decision shall be published in the Official Gazette, and shall take effect as from the issuance date hereof.

Abdullah bin Touq Al Marri

Minister of Economy – Chairman of the Board of Directors of the Insurance Authority

This Decision is issued in Abu Dhabi on 18.11.2020.