Dubai regulator DFSA slaps $455,000 fine on reinsurance brokerage

Dubai: A Dubai-based reinsurance brokerage operating in the DIFC has been fined $455,176 (Dh1.67 million) by the Dubai Financial Services Authority (DFSA), it said on Monday.

The penalty was imposed on Ed Broking (MENA) Limited, after the DFSA found the firm had engaged in misleading and deceptive conduct involving reinsurance premiums, commissions and altered documents.

According to the DFSA, the brokerage provided different premium figures to insurers and reinsurers for the same reinsurance placements—a practice regulators say undermines trust in financial markets.

The watchdog found that the firm gave insurers and reinsurers two different premiums for the same deal and misled reinsurers about deductions and commissions. The company also misled clients about brokerage earnings across 121 placements and used altered documents to support the misconduct.

Alan Linning, Managing Director, Enforcement, of the DFSA, said, “The Dubai Financial Services Authority (DFSA) expects financial services firms within Dubai International Financial Centre (DIFC) to uphold the highest standards of conduct in their business dealings. In misleading clients and reinsurers as it did, Ed Broking (the Firm) failed to meet these expectations.”

Linning said, “The fine imposed on the Firm reflects the seriousness of its misconduct and serves to warn others against engaging in similar conduct.”

The fines explained

The total fine of $455,176 includes:

• $175,343 in disgorgement, covering improperly earned amounts plus interest

• $279,833 as a financial penalty

The original fine was higher — $575,104 (Dh2.11 million) — but was reduced after the firm agreed to settle the case.

Why it matters

The DFSA also found that the firm failed to communicate in a clear, fair and non-misleading way, and act with due skill, care and diligence, as required under DFSA rules.

These standards apply across banking, insurance, asset management and reinsurance businesses operating in the DIFC.

The DFSA acknowledges that the firm promptly reported the misconduct to the DFSA, conducted an internal investigation, and paid restitution to Clients in respect of placements involving the use of altered documents.

The DFSA said it remains committed to enforcing world-class regulation in the DIFC, with a focus on market integrity, ethical conduct and investor confidence.