A New Era Is Dawning For Disputed Insurance Claims in the UAE

The Federal Law No. (3) Of 2018 on the Amendment (“Amendment”) of Certain Provisions of Federal Law No. (6) Of 2007 Concerning the Establishment of the Insurance Authority and Organization of its Operations (“Law”) came into force on 1st May 2018. The Amendment to the Law aims at reducing the time and costs associated with resolving insurance disputes.

The Amendment lays down the set of procedures to be followed by Insurance Companies in processing insurance claims and the process for the insured and/or their beneficiaries who wish to challenge the insurers’ decisions before the Insurance Authority.

In accordance with Article 110 (1) of the Law as amended, insurers must issue a decision in all insurance claims in accordance with the Insurance Authority Code of Conduct and Ethics (as set out in Board Resolution No. 3 of 2010, issued by the Insurance Authority); and give reasons in writing when rejecting a claim.

In the event of a dispute between the parties, the insured party may file a written complaint with the Insurance Authority which might seek clarifications from the insurers. If the insured party objects to the clarifications provided by the insurers, it may refer the matter to a specialized committee as provided under Article 110 (3).

Article 110 (2) grants wide powers to the dispute resolution committees such as power to compel production of documentation as necessary, to seek assistance of experts and witnesses and to adopt other alternative measures requisite for the settlement of disputes.

The Law stipulates that a insurance related claims will not be heard by local courts unless the same has been first considered by the Dispute Resolution Committees to be set up by the Insurance Authority pursuant to a resolution issued by the Board of Directors of the Insurance Authority. The resolution will set out, inter alia, how the committee(s) will be formed along with the details of their jurisdiction, powers as well as the procedures to be followed in the resolution process. The resolution shall also identify the types and branches of insurance to be dealt with by the committee(s).

On 15th July 2019, the Insurance Authority issued Board Resolution No. (33) of 2019 Concerning the Regulation of the Committees Responsible for the Settlement and Resolution of Insurance Disputes (the ‘Resolution’) according to which:

  • Each committee shall consist of a chairman and two or more members of the Insurance Authority.
  • Each committee will have a substitute chairman and members which, it is understood, would adjudicate in the absence of the main members.
  • The Insurance Authority may assign the chairman’s position in the committees to a judge to be delegated in consultation with the relevant authority.
  • The committees shall consider the dispute of all classes and types arising from complaints filed by the insureds, the beneficiary or any affected person who has a right to bring a dispute against an insurance company incorporated in the UAE and any foreign insurance company which has been licensed to carry out insurance activities in the UAE through a branch office or through any insurance agent (Article 4 of the Resolution). Thus, implying that any claim by an insurance company would fall outside the purview of the committees.

Article (5) of the Resolution enlists the types of actions and disputes that are beyond the jurisdiction of the committee(s), viz.

  • orders, summary and interim actions and orders, or precautionary attachment;
  • the insurance disputes heard before courts prior to the date of the Resolution coming into force; and
  • insurance disputes which are subject to an arbitration clause

The Law has been strictly interpreted as can be seen in the recent case, Case No. 1391/2018, wherein the Abu Dhabi Court of First Instance (“Court”) dismissed the claim of the insured party against the insurer as the claimant (the insured) did not follow the procedure as laid down in the amendment. The Court held that insurance related disputes will not be accepted by the local courts of the UAE unless the same have been first dealt with by these specialized committees set up in accordance with Article 110 (2). The Court dismissed the case for non-compliance of Article 110 (3) as the claim which had been filed on 30th May 2018, 30 days after the Amendment was ratified, had not been considered by a Dispute Resolution Committee set up by the Insurance Authority before bringing the matter to the court. The ramifications of the decision could be that the courts shall not consider insurance claims in future unless the procedural requirements of Article 110 of the Law as amended by the Amendment are complied with. This shall apply to all cases filed after 1st May 2018.  As UAE does not have system of precedents it will be interesting to see if courts go ahead with this reading of the Law.


Adv. Richa Dewan
Corporate & Commercial | Property – Real Estate | DIFC Litigation | Arbitration and Dispute Resolution