The Insurance Authority has adopted BOD Resolution No. 3 of 2010 in the form of directives pertaining to the Code of Ethics & Professional Practice for Insurance Companies ("Insurers") operating in the UAE.

The Resolution consists of sixteen articles as summarised below.

Article 1 sets out the definitions.

Article 2 confirms that the Decision shall apply to all companies registered with the Authority and operating in the UAE.

Article 3 consists of general provisions that introduce new obligations on Insurance Companies in relation to ensuring that their business and dealings are conducted in good faith; in an environment of disclosure and transparency where best practices are followed and relevant information is relayed clearly and concisely to clients in proper legal terms. Insurers cannot decline an insurance application or refuse to renew an insurance policy or discriminate between insureds without good reason.

The Article prohibits insurance companies from dealing with any person or entity whose professions are related to insurance, which is not licensed by the Authority. Insurance companies should fully comply with the terms of compulsory insurance policies and take the appropriate steps to enforce anti-money laundering directives; to ensure that insurance policies are made in the Arabic language which is to prevail if there is any conflict in interpretation with any other version of the policy. The Article also instructs insurers to circulate those directives to their staff.

Article 4 deals with the obligations of insurers when providing their products to clients. Insurers are obliged to answer client queries in a professional, concise and prompt manner, issue insurance policies as soon as is practically possible after reaching agreement, raise awareness amongst the insured on how to prevent accidents and mitigate their effects, provide access to all documents and information to which the insured are entitled and provide clients upon request with statistics on the results of their transactions with insurers.

Article 5 defines the obligations insurers have to price their insurance products in accordance with accepted technical standards, pursue a balanced approach, provide detailed pricing reports itemising all fees and taxes, comply with the compulsory insurance pricing regime and notify the Authority of the pricing scheme the company intends to apply.

Article 6 explains the requirements pertaining to the insurance application form in terms of the questions having to be phrased in clear and comprehensible terms and having to include questions relating to the material facts to which companies give special consideration when deciding to accept risk. In addition, the form must include a warning about the legal consequences of providing inaccurate information materially related to a claim and such information must be filled out by the client and not by any of the employees of the insurer. The application should state that the information has been filled out by the applicant and that the signature on the application is the signature of the applicant or his legal representative. The application must also advise the applicant to keep all documents and communications between himself and the company and instruct the company to furnish the client with a copy of the insurance application for his records.

Article 7 deals with the insurers obligations when preparing the insurance policy in terms of having to use clear legal language to avoid misunderstanding and the policy having to be clearly printed and legible with each term printed in a conspicuous manner if related to an event that would render the contract void or lead to denial of the insurance claim.

The arbitration clause must be drafted in the form of a special agreement that is separate from the general conditions printed in the insurance policy which is to comprise all the terms and conditions, including, inter alia, the number of pages and annexures, a precise description of the subject matter and sum insured, guidance on the procedures to be followed upon occurrence of an insured event, a specific deductible clause and a prominently displayed termination clause.

Article 8 deals with the insurers obligations when renewing an insurance policy in terms of having to notify the client upon renewal and sending notice of impending expiry of the insurance period and alerting the client of the necessity of notifying any changes to existing information.

Article 9 explains the claims procedure and how insurers are to handle claims in terms of the process, the preparation of forms, the documents that are to be submitted, the period for deciding claims and doing so in accordance with the law and the terms of the policy, keeping the beneficiary apprised of developments in regard to his application, paying out promptly or giving precise reasons for declining the claim and maintaining a file for each claim for audit purposes.

Article 10 is dedicated to the register of complaints which insurers are required to maintain to record client complaints.

Article 11 addresses insurers responsibilities for compliance with the requirements for integrity, honesty and objectivity when issuing notices, bulletins and statements to the public

Article 12 addresses insurers compliance requirements in relation to notices pertaining to the insurance of persons and accumulation of the funds operations.

Article 13 states that insurers must ensure transparency and professionalism in dealing with authorities and official bodies.

Article 14 urges insurers to settle their accounts to ensure the smooth operation of the insurance market and to resolve their disputes by amicable means or through the Emirates Insurance Association before approaching the Courts.

According to Article 15 these Directives are set to replace the existing rules governing the operation of insurers in the UAE insurance market promulgated by Ministerial Decision No. 296 of 2004.

According to Article 16, the Directives are to take effect 3 months after publication and were issued on 21.03.10.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.