A number of key industry figures have called for a last minute changes to forthcoming BOD-49 regulatory changes to be amended or face a mass exodus of advisers from the United Arab Emirates.
International Investment has this week been contacted by a number of key industry figures - including some of the region's major brokers/advisory and insurance providers - who have called on the UAE Insurance Authority to allow last minute amendments to BOD-49 directive before it comes into force this week (from midnight (UAE time) on 14th October - so effectively from 15 October).
Many brokers and advisers in the Dubai and the UAE are currently frantically contacting clients to complete the paperwork on insurance policies before the rule change which, it is estimated, could cost many clients an average of 30% more, with, in some cases premiums rising to more than double the current premium levels.
BOD-49 will be a sad chapter in the UAE regulatory story when it is clear to all parties that this is a misguided and poorly-written piece of legislation that will only achieve one thing; demise of the insurance industry."
Term assurance, whole of life and savings products - the lifeblood of UAE advisory industry - particularly for those that deal with expats from regions such as India, Pakistan, The Philippines etc, are expected to be hardest hit by the changes.
'Massive negative impact'
A top-level source at one of the region's biggest adviser firms - one of a number who have spoken to II and asked not to be named - said that the proposed BOD-49 regulations are going to have a "massive negative impact on the UAE market", with brokers set to leave the region, with many looking the Far East.
They also predict that popular savings and protection products from some of the insurance world's biggest names are now also set to closed to new business due to regulatory change.
"I could see the UAE market going back 25 years as written premium shrinks and we could see the exit of many insurance companies as well over time," the source said. "Already some have said they will exit the savings business so this may be a prelude to a full exit."
Another key player in the region, again, who did not want to be named, told II that they felt that the implementation of BOD-49 has "no benefit for the consumer in terms of pricing of products and inevitably will be more expensive.
"The consumer will also have less choice because there will be fewer brokers and providers with some looking to exit the UAE since it is no longer a friendly jurisdiction from which to operate," the source said.
"BOD-49 will be a sad chapter in the UAE regulatory story when it is clear to all parties that this is a misguided and poorly-written piece of legislation that will only achieve one thing; demise of the insurance industry."
Another source told II: "The new regulations are not good for the clients and the profession. We should not be reinventing the wheel.
"[We should] open up have more providers let the competition decide how much clients should pay."
The changes within the controversial Insurance Authority BOD-49 ruling (full title Insurance Authority Board of Director's Decision No. 49 of 2019 Concerning Instructions for Life Insurance and Family Takaful Insurance (BOD49), which has been debated and reviewed for almost four years ahead its implementation will, pending any last minute changes, be enforced on 15 October 2020.