The Capital Market Authority has issued Decision No.53/2013 promulgating the Regulation for Insurance Brokers to regulate the business and develop the performance in line with the insurance market’s movement.

Ahmed Ali Al Maamari, Director of Financial and Technical Regulation said the regulation would add an efficient regulatory dimension to upgrade the profession of insurance brokers.

The new regulation focus on the technical and legal aspects of insurance brokers business for the sake of providing more professional services to clients according to specific mechanisms in the local market and according to best international practices to ensure the rights of the transacting parties especially the policyholders and to regulate the relationship between insurers and clients through a number of requirements such as segregation of clients and  insurers funds from the brokers’ funds, the requirement of written agreement between the broker and insurer in addition to specifying the brokers responsibility toward the clients,  ensuring the broker providing best prices for the insurance coverage and specifying  a term for payment of dues to the insurers and clients.

The regulation provides a definition for the broker as being the person who is licensed by CMA to carry out insurance brokers business to intermediate between the clients and insurers in consideration of commission from the insurer. 

Insurance brokerage takes two main forms  according to international practices. The broker may market the insurance products licensed for the insurer they represent which is called insurance agent while the second form is the independent broker who markets the products of  several insurers which include property insurance, life assurance, health insurance etc.

The broker represents the policyholders  and act on their behalf in the execution of insurance operations as well as playing the role  of a consultants through selection of appropriate type of insurance as well as the insurer. They assist the client in selecting the suitable coverage.

There are 32 insurance  brokers carrying out insurance business according to Insurance Regulations issued vide Ministerial Decision No. 101/1990 which was repealed by Decision No. 53/2013 and granted the brokers six months to correct their status according to the new regulation which may be extended according to the discretion of the Executive President of CMA for not more than six months.