The United Arab Emirates (UAE) market (the ‘federal insurance market’), which is regulated by the Federal Law No. 6, concerning the establishment of the Insurance Commission, published in August 2007.
The Dubai International Financial Centre (DIFC), which is a purpose-built financial free zone, falling under the regulation of the Dubai Financial Services Authority (DFSA). The DIFC is geographically located in Dubai, UAE.
Lloyd’s trading status varies depending on whether the business is transacted from the United Arab Emirates federal territory or from the DIFC as below:
The United Arab Emirates (UAE) Market
Lloyd’s underwriters are not licensed in this territory and are not therefore permitted to write direct insurance business in or from this territory. There are currently no known exceptions to this restriction. Lloyd’s underwriters are also not permitted to appoint coverholders to write direct insurance in this territory on their behalf.
Reinsurance business can be done on a cross-border basis1 only from the UAE, but the physical writing of reinsurance business within the UAE territory is not permitted. The appointment of coverholders to write reinsurance is also not allowed.
The Dubai International Financial Centre (DIFC)
Lloyd’s is not licensed in this financial free zone; however, underwriters are permitted to accept direct insurance business of non-UAE risks through coverholders located in this territory. All coverholders have to be approved intermediaries by the DFSA. Underwriters should ensure that when writing direct insurance from territories outside the UAE, they comply with any requirements governing the insurance of the risk in the jurisdiction in which that risk is situated.
Reinsurance is permitted to be conducted through coverholders located in this free zone as well as on a cross-border basis.
1 If written from outside of the territory
