A Chapter From - Regional Practical Guidance - Insurance - UAE
Transport & Insurance Focus
The UAE’s insurance sector is governed by a robust and evolving regulatory framework, with the CBUAE playing a central role in maintaining market stability, enhancing consumer protection, and promoting regulatory convergence.
Law Update: Issue 376 – Transport & Insurance
Anand SinghSenior Counsel, Transport & Insurance
Veena ShankarParalegal, Transport & Insurance
This article forms part of a regional regulatory guide for the insurance sector and outlines sample questions and responses relevant to the United Arab Emirates (UAE). It provides a comprehensive overview of the UAE’s insurance regulatory landscape, following the merger of the UAE Insurance Authority into the Central Bank of the UAE in 2020. The CBUAE now functions as the unified and independent regulator for the insurance, reinsurance, and takaful sectors across the onshore jurisdiction.
This guide explores key regulatory considerations in the UAE, including licensing, capital adequacy, outsourcing restrictions, intermediary obligations, the role of financial free zones, branch versus subsidiary structures, and mechanisms for dispute resolution. It is designed to support insurers, reinsurers, intermediaries, and investors in understanding and navigating the UAE’s regulatory environment—one of the most mature and diverse insurance markets in the Gulf region.
What is the name of the main regulator(s) governing insurance in this jurisdiction? The insurance and reinsurance sector in the UAE, including takaful insurance, is regulated and supervised by the Central Bank of the UAE (“CBUAE”), which has acted as the unified regulator for both the banking and insurance sectors since 2020. Prior to this, the UAE Insurance Authority served as the independent regulatory body overseeing the insurance industry. In 2020, the Insurance Authority was merged into the CBUAE, which subsequently assumed full supervisory and regulatory responsibility for the insurance sector.
In addition to the CBUAE, health insurance is regulated at emirate level. In Dubai, health insurance regulated by the Dubai Health Authority and in Abu Dhabi, by Department of Health. Up until December 2024, health insurance was mandatory only in Dubai and Abu Dhabi. However. since January 2025, health insurance has become mandatory for all the other emirate of the UAE and the Ministry of Human Resources and Emiratisation (MOHRE) will oversee enforcement of this requirement.
What are the main areas which they regulate?
The insurance operations are primarily regulated under the Federal Law No. 48 of 2023 concerning Insurance Activities in the UAE (“Insurance Law”) which repealed the previously issued legislation of Federal Law No. 6 of 2007.
Article 8 and 9 of the Insurance empowers the CBUAE to regulate all aspects of the insurance industry, which includes but is not limited to the following:
Licensing of insurers and insurance intermediaries
Corporate governance
Solvency and capital adequacy requirements
Risk management and internal controls
Anti-money laundering and combating the financing of terrorism (AML/CFT)
Policyholder protection
Product regulation and approval
Regulatory reporting and supervision
The UAE’s insurance sector is governed by a robust and evolving regulatory framework, with the CBUAE playing a central role in maintaining market stability, enhancing consumer protection, and promoting regulatory convergence with international standards.
Does UAE have any other independent jurisdiction that function separate from the onshore jurisdiction? Yes. The UAE comprises three main legal jurisdictions: (a) mainland/onshore UAE, (b) financial free zones, and (c) non-financial free zones.
There are two financial free zones in the UAE: the Dubai International Financial Centre (DIFC) in the Emirate of Dubai and the Abu Dhabi Global Market (ADGM) in the Emirate of Abu Dhabi. Insurance and other financial services may be conducted within these financial centres, each regulated by its own supervisory authority—namely, the Dubai Financial Services Authority (DFSA) for the DIFC and the Financial Services Regulatory Authority (FSRA) for the ADGM.
The Insurance Law clearly specifies the scope of the CBUAE's authority by defining both what it regulates and whom it regulates. The CBUAE is responsible for regulating all insurance activities conducted within the UAE, excluding those carried out by entities licensed within the financial free zones.
Accordingly, insurance business in the UAE may be conducted either:
within the financial free zones, under the jurisdiction of the DFSA or FSRA, or
within onshore UAE (including the non-financial free zones), under the regulatory oversight of the CBUAE.
Are there limits or requirements for outsourcing operations to third-party vendors, particularly for critical functions?Yes, (re)insurance companies and intermediaries are permitted to outsource functions or operations to third-party service providers. However, where an insurance company intends to outsource any material activity or function, it must first obtain a no-objection from the Central Bank of the UAE (CBUAE) prior to proceeding with the outsourcing arrangement. A material activity or function is defined as one that is critical to the insurer’s operations and, if disrupted, could negatively impact the operations of the insurance companies.
Similarly, insurance brokers are subject to the same approval requirements when outsourcing material functions. However, unlike insurers, insurance brokers are prohibited from outsourcing any functions to service providers located outside the UAE.
How are foreign branches regulated in the UAE?Foreign insurers operating as branches in the UAE must obtain a license from the CBUAE and are subject to the same prudential, conduct, and operational requirements as locally incorporated insurers. They must appoint an authorised /branch manager, maintain a prescribed capital amount mentioned below in Q7, and submit periodic reports to the CBUAE.
What are capital requirements for an insurance company in the UAE? The Insurance Law prescribes the following capital requirements for insurance and reinsurance companies operating in the UAE:
AED 100,000,000 for an insurance company.
AED 250,000,000 for a reinsurance company.
These capital requirements apply equally to foreign branches of insurance companies licensed to operate in the UAE.
In addition to the above, insurance companies are also required to maintain a bank guarantee deposit, the amount of which depends on the type of insurance business conducted:
AED 4,000,000 for life insurance business.
AED 6,000,000 for general (non-life) insurance business.
The capital requirements for other insurance-related service providers are as follows:
Insurance Brokers
AED 3,000,000 in capital for a locally incorporated broker
AED 3,000,000 bank guarantee (in addition to capital)
For a branch of a foreign broker, the required capital is AED 10,000,000, and the bank guarantee deposit is AED 5,000,000
Insurance Agents:
AED 500,000 capital requirement
Loss Adjusters:
AED 1,000,000 capital for a loss adjusting company
Health Insurance Third Party Administrators (TPAs):
AED 5,000,000 capital requirement
Actuarial Firms:
AED 100,000 for an actuary company
AED 250,000 for a branch of an actuary company
These requirements are designed to ensure that all participants in the insurance ecosystem maintain financial soundness, provide adequate protection to policyholders, and operate within a robust regulatory framework.
Is there a statute of limitations on insurance claims? If so, what is it?
Yes. In addition to the Insurance Law and the secondary regulations issued by the Central Bank of the UAE (CBUAE), Federal Law No. (5) of 1985 on the issuance of the Civil Transactions Law of the United Arab Emirates (“Civil Code”) also contains provisions governing insurance contracts and claims.
Under Article 1036(1) of the Civil Code, the limitation period for claims arising under an insurance contract is three years from the date on which the insured became aware of the occurrence giving rise to the claim.
What mechanism do insurance policies usually provide for resolution of coverage disputes?Insurance companies are required to establish a fair, transparent, and accessible complaints handling framework, supported by robust internal controls. They must also clearly communicate to policyholders the procedures for lodging complaints. Upon receiving a complaint, insurers are obligated to address it promptly and fairly, while also informing the complainant of the available escalation mechanisms. This includes the option to refer unresolved disputes to Sanadak, the independent ombudsman unit established by the CBUAE to facilitate dispute resolution within the insurance sector.
The procedures for handling and escalating complaints must be clearly outlined in the policy documentation. Additionally, most insurance policies include an arbitration clause as a means of resolving disputes. However, under UAE law, for an arbitration clause to be valid and enforceable in an insurance contract, it must be executed in a separate agreement, distinct from the main policy document. If this requirement is not met, the arbitration clause will be deemed invalid and unenforceable.
The UAE’s insurance sector is governed by a robust and evolving regulatory framework, with the CBUAE playing a central role in maintaining market stability, enhancing consumer protection, and promoting regulatory convergence with international standards. The consolidation of insurance supervision under the CBUAE has brought greater cohesion and oversight across the financial services sector, while the issuance of Insurance Law has modernised the legislative foundation for insurance operations.
Nonetheless, insurers and intermediaries must navigate a range of nuanced regulatory requirements—particularly around outsourcing approvals, capital requirements, licensing structures, etc. As such, proactive legal and regulatory advice remains essential for successful market entry, compliance, and long-term strategic growth in the UAE.
Our insurance lawyers in UAE regularly advise clients on regulatory compliance, market entry, corporate structuring, licensing, and complex claims and disputes. Whether you are looking to launch, expand, or restructure your insurance operations in the UAE, our team is well-equipped to help you navigate the regulatory framework with confidence. Please feel free to contact us for tailored legal support on any insurance-related matters in the UAE.
For further information,please contact Anand Singh andVeena Shankar.
Published in April 2025
