Dubai: When you apply for an insurance claim, it is common for many insured claims to be challenged by insurers for numerous reasons, including lack of proper disclosures, failure to pay premiums or that simply the loss was not covered within the policy terms and conditions.
Yet, while these might be genuine challenges for what is commonly termed “declinature” (declining to cover the loss under a policy), there are however, genuine claims which are too often turned down for frivolous reasons given by the insurer, which sadly does occur in the UAE insurance market.
Historically, the only avenue then for the insured/policyholder (sometimes through an insurance broker) is to challenge the insurers in the UAE courts or through arbitration, both of which can be extremely costly, with uncertainty of outcome. This results in limited consumer protection for retail-insured customers with motor, life, health, and other similar insurance policies.
All insurance companies must protect the interests of customers, while balancing their financial interests. For example, in the United Kingdom, all insurers must treat customers fairly, which is enshrined in the UK regulatory rules as “Treating Customers Fairly” (TCF).
The UAE Insurance Authority (as it was called then), now the UAE Central Bank, instituted several changes through an amending law to finally come up with an alternative dispute forum, termed the “Insurance Dispute Committee” (Dispute Committee), which now overseas all types and classes of insurance disputes arising from complaints of an insured, beneficiary or an affected party, with regard to the insurance coverage.
The Disputes Committee is now the first port of call for any insurance dispute, and the decision of the Disputes Committee is appealable to the courts of First Instance in the UAE.
The Dispute Committee rules of procedure provide the mechanisms for the parties to firstly settle amicably through “Amicable Settlement” – wherein the policyholder simply initiates a complaint against the insurance company electronically through the regulator’s portal specifying the detail of the dispute.
The insurance company must respond within 5 working days with its response. This allows the parties to try and resolve the dispute between themselves. If the insured/policyholder objects to the insurer’s response, a representative from the regulator may step in and try and resolve the matter. If the dispute is still not resolved at this point, the dispute is then escalated to the Disputes Committee to conciliate the matter.
The Dispute Committee will use a conciliation process and try and resolve the dispute within 15 days of the filing of the dispute with the Committee, which can be extended to a further 15 days if needed. Should a settlement be reached the Disputes Committee will attest the settlement through a settlement deed, which is capable of enforcement in the local courts.
Should the dispute not resolve through conciliation, the Dispute Committee will refer the dispute to formal dispute resolution, which provides wide procedures akin to the UAE Civil Procedural Rules allowing witness and expert evidence.
At this stage, the parties may join additional parties to the complaint that have an interest or some liability, such as reinsurers. The Dispute Committee is required to furnish its decision and findings within 20 days of receipt of all documents and information, which can be extended to a further 20 days if needed.
Either party can appeal against the Dispute Committee’s decision/award within 30 days from the date of the decision/award to the Courts and should the parties fail to appeal within the 30 days the decisions/award becomes final and binding enforceable through the courts.
The Dispute Committee is a long overdue and welcome change for insurance disputes in the UAE offering more protection to consumers of insurance. The processes and procedures for filing a complaint are relatively straightforward without the need of lawyers and completed electronically. There are no fees payable and the Dispute Committee members offer expertise and knowledge in insurance matters as a specialist tribunal,
The wide scope of the Dispute Committee in terms of the insurance matters that it covers and the multiple parties that can be involved in the dispute, such as reinsurers offers further consumer protection especially given that most of the insurance risk in the UAE is ceded out to foreign markets.
Simon Peter D Isgar is a partner and Anand Singh is a senior associate (insurance and reinsurance) at BSA Ahmed Bin Hezeem & Associates LLP, a law firm founded in Dubai and operating out of Dubai International Financial Centre (DIFC).