Process to merge Insurance Authority into Central Bank of UAE begins

By CL Jose

Aim is to transform CBUAE into one of top central banks globally

Abu Dhabi/January 27-2021: The Central Bank of the UAE (CBUAE) on Wednesday announced the commencement of operational procedures aimed at assuming the supervisory and regulatory responsibility of the insurance sector in the UAE.

It was the Decretal Federal Law No (25) of 2020 that decided the merger of Insurance Authority into the Central Bank. Sheikh Mansour bin Zayed Al Nahyan (seen in the picture), Deputy Prime Minister and Minister of Presidential Affairs and Chairman of the Central Bank of the UAE stated that the country’s leadership is keen on taking the appropriate decisions to enhance the performance and indicators of federal entities through the unification of efforts.

It needs no mention that the banking sector is a key pillar to the UAE’s economy. Sheikh Mansour said the decision to merge the Insurance Authority into the Central Bank of the UAE is part of a bigger initiative to transform the Central Bank of the UAE into one of the top 10 central banks globally.

CBUAE to get broader mandate

Abdulhamid M. Saeed Al Alahmadi, the Governor of the CBUAE, said that giving the Central Bank a broader mandate will ensure that high standards of supervision and regulation apply to all the sectors the Central Bank regulates, including banking, insurance, money exchangers and payment services providers.

“Our vision to build a prosperous insurance sector that protects the interests of the policyholders and ensures adequate supervision and regulation, characterised by financially strong and properly managed insurance market participants following the highest standards of market conduct,” he added.

The Decretal Federal Law issued earlier in this regard stipulates that CBUAE shall assume the regulatory, supervisory, licensing and enforcement functions of the insurance sector.

As per provisions of the Decretal Federal Law, the CBUAE is obliged to monitor the financial solvency of insurance companies, ensure ethical conduct of firms, and protect the rights of the insured.

The CBUAE has recently formed several committees and working groups chaired by the Governor of the CBUAE to complete the merger process.

Following the completion of the merger process, CBUAE in cooperation with relevant international authorities, will ensure implementation of best practices and standards in executing its mandate to supervise and regulate the insurance sector.

The Central Bank said it will continue to facilitate the advancement of new technologies across all elements of the UAE’s financial sector as part of its FinTech strategy, including the adoption of InsurTech for insurance services.

“These initiatives will make the sector more competitive, innovative and facilitate financial inclusion,” an official statement said.

CBUAE confirmed that the rules, decisions, circulars, and regulations issued by the Insurance Authority under the provisions of the Federal Law No (6) of 2007 shall continue to apply to all licensed institutions and activities until replaced by regulations issued by the CBUAE.

 

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