The new legislation raises insurance brokers’ costs

Costs related to the activity of insurance brokerage have also been increased due to changes in legislation whereby minimum capital has been raised from 1 to 3 million AED ( 0.27 to 0.8 million USD) for local brokers and up to 10 million AED (2.7 million USD) for foreign brokers. Levels of bank guarantees for local brokers have also been increased to 3 million AED (0.81 million USD) per company to which 1 million AED (0.27 million USD) per regional office shall be added.

As for foreign brokers, these sums have been raised respectively to 5 and 3 million AED (1.3 to 0.81 million USD). Alongside these measures, each broker is required to hold a professional liability policy amounting to 2 million AED, (0,54 million USD), compared to 1.5 million AED (0.4 million USD) in the past. Finally, the authorities require brokers to have a written mandate from the customer before starting any commercial procedures.