The Central Bank of the UAE (CBUAE) announced on Wednesday that it has prohibited a Takaful insurance company from issuing or renewing motor and health insurance policies due to violations of regulatory requirements. The move comes as a result of the insurer’s failure to meet the minimum capital requirements set by the CBUAE.
In a statement, the regulator revealed that the ban would remain in place until the company rectifies its solvency position. The insurer has been given a six-month window to address the issues and comply with the CBUAE’s directions. However, the CBUAE did not disclose the name of the Takaful company involved.
“This action is part of the CBUAE’s ongoing efforts to ensure that all insurers, their owners, and staff strictly adhere to UAE laws, regulations, and standards. This is to protect policyholders and maintain the integrity of the insurance sector and the UAE’s financial system,” the statement said.
The decision to prohibit the insurer from issuing new contracts or renewing existing ones was made in accordance with Article 33 of Federal Decree Law No. (48) of 2023, which governs insurance activities in the UAE.
Despite the suspension of new policies, the CBUAE clarified that the insurer would remain responsible for fulfilling all obligations under insurance contracts signed before the prohibition. “The insurer remains liable for all rights and obligations arising from insurance contracts concluded before the decision of the prohibition,” the statement emphasized.
This is the first instance of a Takaful insurer being banned from issuing motor and health insurance due to failure to meet minimum capital requirements. The regulator has reiterated its commitment to ensuring a stable and transparent insurance market, safeguarding policyholders, and maintaining confidence in the financial system.
The CBUAE continues to monitor the situation and is expected to take further action if the insurer fails to comply within the given timeframe. Customers affected by this decision are advised to contact the insurance company for further information and clarification regarding their existing policies.