Talks on for insurance scheme for their employees
DUBAI: Following the successful switching from the AE3000 bank guarantee scheme that covered about 5.3 million employees in the UAE to a more scientific insurance scheme last year, now the 24 free trade zones (FTZs) in Dubai are said to be in talks with insurance companies to introduce the scheme for their 450,000 employees.
Though it is not yet known which insurance companies are involved in the talks, informed sources confirmed that the companies that currently offer the scheme for the onshore employees are naturally keen to involve in the scheme for free zones too.
The largest free trade zone, Jebel Ali Free zone (JAFZ), has already announced the scheme and will soon be returning the AED1.3 billion the JAFZ Authority currently keeps as bank guarantees on behalf of the employees of the companies operating from its free zone.
JAFZ has already indicated its plan to roll out the new employees’ protection scheme based on insurance, by September itself.
It was last year, the insurance protection scheme replaced the more-than-a-decade old bank guarantee scheme, releasing about AED15 billion parked with the local banks on behalf of about 5.3 million employees in the UAE.
The replacement of the bank guarantee scheme by the government with a more realistic insurance cover was hailed by employees and experts in the field for two reasons.
On the one hand, it brought in a more scientific scheme, and more importantly, it saved thousands of hapless employees, who were forced to cough up the guarantee money by themselves as many employers used the scheme to con their unsuspecting employees.
The co-insurance scheme led by Dubai Insurance Company has been in place for a few months now and is joined by other member insurers including Orient, ADNIC, National General Insurance (NGI) and Emirates Insurance Company.
The insurance scheme will soon bring all the ‘onshore’ employees under its fold as the validity of their two-year visa expires, and once all employees fall in the scheme, the total insurance premium will add up to more than AED300 million a year.
Apart from UAE, only South Korea and Singapore from this region or Asia currently run such insurance scheme for their employees and that too for a workforce as small as 300,000 and 500,000 respectively.