UAE Banking Regulation Changes 2023: Key Developments and Implications
The Central Bank of the UAE (CBUAE) has introduced several significant regulatory changes in the banking and insurance sector in 2023. These developments aim to enhance prudential oversight, improve risk management, and strengthen consumer protection.
January: Risk Management Regulation Takes Effect
On January 1, 2023, the CBUAE’s Risk Management Regulation for Insurance Companies came into effect. This regulation establishes a comprehensive framework for risk management and internal control standards for insurers. Key requirements include:
- Prior approval from the CBUAE for outsourcing material business activities
- Maintenance of a register for all outsourced material and non-material business activities
January 1, 2023: Key Requirements
- Prior Approval: Insurers must obtain prior approval from the CBUAE before outsourcing any material business activities.
- Register Maintenance: A register must be maintained to document all outsourced material and non-material business activities.
February: Clarification on Escrow Account Requirements
On February 3, 2023, the CBUAE issued Circular No. CBUAE/BIS/2023/575 to clarify escrow account requirements for insurance entities, including TPAs, agents, and brokers. The circular provides guidelines on maintaining escrow accounts and executing escrow agreements with UAE banks.
February 3, 2023: Key Guidelines
- Escrow Account Requirements: Insurance entities must maintain separate escrow accounts for each client.
- Escrow Agreement: A clear escrow agreement must be executed with the UAE bank.
March: Ombudsman Regulation Implemented
In March 2023, the CBUAE implemented the Ombudsman Regulation, which establishes an Ombudsman Unit to handle complaints and grievances from consumers and potential consumers. The regulation applies to all licensed financial institutions, including insurance companies, and requires them to maintain a register of complaints.
March 2023: Key Requirements
- Ombudsman Unit: Establishes an Ombudsman Unit to handle consumer complaints.
- Register Maintenance: A register must be maintained to document all complaints.
Dubai Health Authority Issues Circular
On March 2023, the Dubai Health Authority issued Circular No. GC (1) of 2023, directing insurers to provide health insurance data requested by Dubai Health Insurance Corporation within a specified timeline. Insurers are also required to store and archive data related to insured members for at least five years.
Key Requirements
- Health Data Provision: Insurers must provide requested health insurance data within the specified timeframe.
- Data Storage: Data related to insured members must be stored and archived for at least five years.
Abu Dhabi Department of Health Issues Cyber Security Guidelines
In September 2022, the Abu Dhabi Department of Health issued guidelines on cyber security procedures for handling personal and protected information, which applies to insurance providers.
Key Requirements
- Cyber Security Procedures: Insurance providers must implement robust cyber security procedures.
- Personal Data Protection: Personal data must be handled in accordance with the guidelines.