May 03 2012
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Insurers get three-year reprieve on solvency rule
Thursday, May 03, 2012
Dubai The UAE’s insurance companies have won respite from the fast approaching deadline of August 28 to bring their operations in line with the tougher solvency requirements.
They now have another three years to do so, effective from the same date.
In 2007, under Federal Law No 6, the local authorities issued a directive granting five years for insurers to synchronise their operations with solvency guidelines.
August 28, 2012, was supposed to be the deadline.
It meant insurers, for instance, couldn’t mix life insurance and fund investment services with their core operations of underwriting risks in various categories.
“While we were fully committed to the earlier August 28 deadline, the three-year extension would be in the best interests of the entire industry, which has gone through its share of problems brought on by the global downturn,” said a senior official with a Dubai-based insurer.
According to Mustafa Vazayil of Gargash Insurance, “There is a gap in the solvency margins within the local insurance sector and that which is in place at some of the mature insurance jurisdictions in the world.
“Implementing the solvency guidelines would have brought this in sync with worldwide practices.”
By Manoj Nair?Associate Editor
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