Draft bill supervising the reinsurance business in the UAE
A draft bill, governing reinsurance business in the United Arab Emirates, is now being prepared. According to its provisions, reinsurance companies, keen on operating on the local market, are required to be detained by 100% by one or several natural persons hailing from the United Arab Emirates or from a country of the Gulf Cooperation Council (GCC). Reinsurers, detained by at least 51% by an Emirati legal person or belonging to the Gulf Cooperation Council.
The other novelty pertains to underwritten and paid up capital which must be at least equal to 250 million AED (68 million USD). This requirement has been imposed to both national reinsurance companies and to foreign branches. The latter shall be submitted to another criterion, the parent company must have a rating equivalent at least to “BBB” granted by Standard & Poor’s, “Baa” by Moody’s, “B+” by AM Best or “BBB” by Fitch Ratings”.
Once the law has been adopted, reinsurers will have a 12-month period to comply with the new requirements.
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