The Insurance sector in the UAE, is a highly regulated industry. What previously used to be the responsibility of the Insurance Authority in the UAE, now lies under the responsibility and governance of the Central Bank following the recent changes in UAE’s Federal Laws. 

The Central Bank of the UAE, and the UAE Insurance Authority, merged to create a unified regulator for the insurance and banking sector in the UAE. In late 2022, the Central Bank issued a new regulation titled as the “Regulation Concerning the Establishment of Ombudsman Unit in the UAE”, also known as Ombudsman Regulation. Which in Arabic is known as Sanadak. 

The regulation leads to a creation of an Ombudsman Unit which would act as an independent unit that is both financially and administratively independent. With the ability and power to handle complaints. This means receiving them, handling them, reviewing them, and resolving the complaints in a fair, transparent and legally sound manner.

The Ombudsman regulation outlines a clear detailed process on the mechanism set out to handle the complaints. It states who can file a complaint, the type of complaint handling mechanisms available that fall under the scope of the Ombudsman Regulation, the annual fees that is payable under the Licensed Financial Institutions and the insurers. Further, the regulation includes provisions on the internal governing structure including the management, its functions the employees and the delegation of powers. 

Any Insurance disputes, currently needs to be referred to the Insurance Dispute Regulation Committee. Moving forward, all insurance disputes or complaints need to be first sent to the insurance companies and if they are not resolved, then they need to be sent to the Ombudsman Unit. To file an appeal to the decision by the Ombudsman Unit, regarding disputes relating to insurance, the jurisdiction for such appeals lie with the IDRC and hence forward the IDRC will continue to operate as a body, although, with revised jurisdiction. Any appeals to decisions relating to Licensed Financial Institutions, similarly the role will be played by the Unit’ Appeal Committee that is to be setup under the Ombudsman Regulation. 

The Ombudsman Committee would be able and authorized to accept the complaints made against licensed financial institutions and insurers in relation to provisions of services or products or an offer to provide certain services or products by insurance companies or their failure to provide a particular service, or product requested by the complainant due to arbitrary reasons, or a loss that could be financial or harm that affects the complainant through any deception, that is misleading, fraudulent or is an unfair behaviour on behalf of the licensed financial institutions and the insurers.  The entity filing the complaint can be an individual, sole proprietor or small medium enterprises as specified in the regulation. 

An Official Gazette will be published including the Ombudsman Regulation and will be effective for one month from the date of publication and will be operational as of one year from the date of publication of the official gazette Ombudsman Regulation.

 The new regulation makes a significant change in the consumer dispute resolution process which impacts the licensed financial institutions and insurers and the manners in which they handle disputes and complaints. A main criteria prior to approaching the Ombudsman unit is the customer should have filed a complaint with the licensed financial intuitions or the insurers 30 days prior. 

The content of this article should not be taken as legal consultation. In case you are involved in any problems related to the following subject or have any queries, Hassan Al Reyami Advocates and legal consultants would be delighted to address your concerns during a 30-minute free legal consultation session offered to you.