Abu Dhabi: Members of the Federal National Council on Tuesday passed changes to Law No. 6 of 1997 on the Insurance Authority that regulates companies that are licensed to perform operation of cooperative insurance, Takaful insurance, reinsurance and insurance in general. The authority regulates both conventional insurance and Sharia-compliant insurance called Takaful.
The changes were introduced in the insurance dispute resolution system to save time, effort and money involved and reduce the backlog of cases in courts.
The new rules, which require to be signed into law by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, empowers the Insurance Authority to set up specialised committees to resolve insurance disputes.
The new rules also empower the authority to set prices and regulates rights and obligations and establishing funds to protect and remedy persons.
The authority is also empowered under the draft law to impose fines on insurance companies and appoint experts for inspection and auditing.
At present, the authority mandates that each insurance company must maintain a register of complaints from its clients, and must investigate each complaint within 15 days of the date of submission. Decisions should be recorded in the Complaint Register. Complainants can appeal decisions to the Insurance Authority, if their complaint is rejected by the insurance company.
The Dubai Financial Services Authority also requires Dubai International Financial Centre insurers and reinsurers to maintain adequate policies and procedures for investigating and resolving complaints. It requires the insurer/reinsurer to maintain records of all complaints made against it for at least six years from the receipt of the complaint.
Arbitration clauses are recognised and enforced in the UAE and the Dubai International Financial Centre (DIFC). The following formalities must be observed for an arbitration clause to be valid under UAE law.
Under the new rules, no dispute arising out of an insurance policy may be filed in courts if it is not first submitted to the dispute resolution committee concerned.
Decisions by these committees will be binding on the parties to the dispute. They can, however, challenge these decisions before the Court of First Instance within 30 days, from the date they become aware of them, failing which the decisions will become final.
The UAE courts have jurisdiction over any dispute arising out of an insurance policy, if the domicile of the insured is within the jurisdiction. The UAE courts also have jurisdiction over claims brought against a UAE legal entity or a foreign legal entity with a domicile or place of residence in the UAE. Any agreement to the contrary is void under the UAE law
The UAE law recognises choice of law clauses. However, the courts will not apply laws that are contrary to Sharia or the UAE public policy. In addition, there are specific matters where a UAE court will not uphold a foreign choice of law clause, such as, real property contracts entered into or performed in the UAE and employment matters.
The UAE Insurance Authority will generally require insurance policies issued in the UAE to be governed by UAE law. In the case of reinsurance policies, the parties can choose the law applicable to the contract. In addition, choice of forum, venue and applicable law clauses are recognised and enforced in Dubai International Financial Centre insurance and reinsurance contracts.