The United Arab Emirates (UAE) issued a new Federal Insurance Decree No. 48 (‘Decree No. 48 of 2023’) which was published in the UAE Official Gazette (Issue No. 762), the official periodical of laws and decrees issued by the UAE Federal Government, on 31 October, 2023. Decree No. 48 of 2023 came into force on 30 November, 2023.
In summary, the most significant aspect of Decree No. 48 of 2023 is the codification of the transfer of Insurance regulation to the UAE Central Bank (The Central Bank) – this had previously resided with the Insurance Authority of UAE.
Decree No. 48 of 2023 expressly repeals the Federal Law No.6 of 2007 (the 2007 Insurance Law). Below, we outline the most significant amendments:
1- Regarding the composition of the Insurance Dispute Settlement and Resolution Committees:
While the IDRC established under the repealed law was predominantly constituted by employees of the Insurance Authority, with the discretion to appoint a judge to preside the committee, Decree No. 48 of 2023 mandates, as an imperative, that the composition of such committees be chaired by a Judge and include another Judge as a member, in addition to one or more experts designated by The Central Bank. Thus:
Article (101), paragraph (4) of Decree No. 48 of 2023 stipulates that:
-“4. One or more committees shall be established in the Banking and Insurance Disputes Settlement Unit (‘BIDRU’) to be responsible for settling disputes arising from insurance contracts, works and services. The Board of Directors shall issue the necessary resolutions regarding the determination of its terms of reference and powers, the system of work, and the fees of its members and the fees collected by it, in addition to the decisions relating to its formation. It is provided that the committee shall be chaired by one judge and the membership of another judge and one or more experts to be chosen by The Central Bank.”
The Insurance Authority Board of Directors’ Resolution No. (33) of 2019 (‘The Insurance Resolution’) regarding the system of Insurance Dispute Settlement and Resolution Committees in its article (3), paragraph (2) has been amended by the of the New Insurance Federal Decree. The Insurance Resolution stipulated:
-“2. Every Committee consists of a chairman and two or more Members from the employees of the Authority and a similar number in the capacity of an Alternate Chairman and two or more Alternate Members. A decision is issued by the Chairman of the Insurance Authority appointing them and determining their remunerations. The Authority may assign the chairmanship of the Committees to a delegated judge in coordination with the competent authorities.“
2- Concerning the competent authority to consider appeals against the decisions of the Insurance Dispute Settlement and Resolution Committees:
Article (101), paragraphs (5) and (6) of Decree No. 48 of 2023 stipulates that:
-“5. The Company may not appeal the decisions of the Committee referred to in Clause 4 of this Article in disputes whose value does not exceed AED 50,000 (Fifty Thousand Dirhams). Such decisions shall be deemed final and enforceable immediately upon issuance. If the value of the dispute exceeds fifty thousand Dirhams the Company may appeal the decision of the Committee before the Court of Appeal within thirty (30) days from the date of its issuance or becoming aware of it. Otherwise the appeal will be inadmissible.
-“6. Without prejudice to paragraph 5 of this Article the concerned person may appeal the decisions of the committee referred to in paragraph 4 of this Article before the Court of Appeal within thirty (30) days from the date of the decision being made or the notification thereof. Otherwise the appeal will be inadmissible.”
Regarding the system of Insurance Dispute Settlement and Resolution Committees, The Insurance Resolution of 2019 in its article (15), paragraph (3), stipulated:
–“3. The concerned parties may appeal the committees’ decisions to the competent court of first instance within 30 days from the day following the notification of the decision, otherwise the decision will be considered final and enforceable.”
From the preceding context, its is apparent that the competent authority to adjudicate appeals against the decisions of Insurance Dispute settlement and Resolution Committees has become, pursuant to Decree No. 48 of 2023, The Court of Appeal and NOT The Court of First Instance, as it was previously in The Insurance Resolution of 2019.
3- With regard to the quorum for appealing decisions made by the insurance dispute settlement and resolution committees:
Article (101), paragraph (5) of Decree No. 48 of 2023 stipulates that:
-“5. The Company may not appeal the decisions of the Committee referred to in Clause 4 of this Article in disputes whose value does not exceed AED 50,000 (Fifty Thousand Dirhams). Such decisions shall be deemed final and enforceable immediately upon issuance. If the value of the dispute exceeds fifty thousand Dirhams the Company may appeal the decision of the Committee before The Court of Appeal within thirty (30) days from the date of its issuance or becoming aware of it Otherwise the appeal will be inadmissible.
In contrast to the previous legislation, The Insurance Resolution of 2019, which did not specify a quorum for appealing decisions made by the Insurance Dispute Settlement and Resolution Committees, Decree No. 48 of 2023 sets a quorum for appealing the committees’ decisions, stipulating that appeals can only be pursued if the disputed amount exceeds AED 50,000. Consequently, decisions issued by the committees in insurance disputes where the claim value does not exceed the amount of AED 50,000 are deemed final and enforceable.
We conclude from the amendments introduced by Decree No. 48 of 2023 regarding regulating insurance business, that an essential observation is that Decree No. 48 of 2023 is markedly different to The Insurance Resolution of 2019 in relation to the system of Insurance Dispute Settlement and Resolution Committees. By making the appeal against the Committees’ decisions before the Court of Appeal rather than The Court of First Instance, following its modified of the composition of the committees and the added imposition of the appointment of one judge and the membership of another judge, Decree No. 48 of 2023 has replaced the Insurance Disputes Settlement and Resolution Committee with The Court of Appeal in adjudicating the insurance disputes that fall within its jurisdiction.
Now that decisions are referred to the Court of Appeal illustrates that the BIDRU will act in place of the Court of First Instance, thus reducing the stages necessary to reach a final and binding decision in relation to insurance legal claims. Thus, the BIDRU constitutes one of the jurisdictional levels specified in the UAE federal judicial system, e.i. the Court of First Instance. This is a welcome step and potentially a significant improvement towards greater efficiency and expediency.
The above Summary regarding Decree No. 48 of 2023 is by no means exhaustive – other aspects of this significant Decree will follow in the next News Alert.
For more information, please contact our Authors:
Mr. Mohammed Lemine
Head of Insurance & Reinsurance Practice, Partner
Email: lemine@alsuwaidi.ae
Mr. Ibrahim Jarjoura
Associate, Insurance & Reinsurance Practice