New UAE Insurance Law: Claims under Dh50,000 Can't Appeal Disputes

The UAE's insurance landscape witnessed significant changes with the replacement of the Insurance Settlement Dispute Committee (IDC) by the Banking and Insurance Dispute Resolution Unit (Bidru) under the revised insurance laws. Bidru, an independent body, has been set up to handle complaints against insurance companies and resolve disputes related to insurance contracts and services.

Bidru's Decision and Appeal Process

The revamped laws now dictate that insurers cannot challenge Bidru's decision if the claim value is below Dh50,000, as per the new UAE insurance regulations. However, if the claim value exceeds this amount, insurers can appeal Bidru's decision within 30 days before the Court of Appeal.

Sam Wakerley, the head of insurance and reinsurance at Holman Fenwick Willan (HFW) in the Middle East, highlighted Bidru's role, indicating its equivalence to the UAE Court of First Instance. This step aims to streamline the process for reaching final binding judgments in insurance claims.

Impact of the New Laws

Effective since November 30, 2023, Federal Law No. 48 of 2023 replaced Federal Law No. 6 of 2007, ushering in various changes in the insurance sector. The new regulations allow the purchase of insurance from foreign companies if not available locally. Additionally, electronic policy issuance is now permitted, and certain policies may not require an Arabic version.

The Emirates Insurance Association has transitioned into the Emirates Insurance Federation, now overseen by the UAE Central Bank.

Role of the Central Bank and Applicability of Laws

Under Article 104 of the new insurance law, the Central Bank gains the authority to intervene in lawsuits involving insurance entities or professionals. The Central Bank can offer clarifications or data following an investigation into the matter upon lawsuit notification.

The updated insurance laws apply to companies in non-financial free zones and onshore UAE but exclude companies in financial free zones. This distinction differs from the 2007 Insurance Law, which did not distinguish between free zones and financial free zones.

These new regulations signify a shift in insurance oversight from the Insurance Authority to the UAE Central Bank, aiming to streamline the insurance sector while retaining many provisions from the previous 2007 Insurance Law, aligning them with the objectives of the new insurance law.