The UAE Insurance Authority (IA) yesterday implemented its delayed BOD-49 reforms to the Gulf state's insurance industry, despite last-minute pleas from the sector for the legislation to be amended or even reconsidered altogether.
The "gamechanging" legislation, which introduces a range of requirements for life insurance providers and those advisers who sell their products, has been given a cautious welcome at best from an industry wary it could do more harm than good.
Last week II exclusively reported that a number of key industry figures have called for a last minute changes to the BOD-49 reforms to be amended or risk a mass exodus of advisers from the UAE's insurance sector.
The imminent arrival of BOD-49 has prompted any 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.
The new rules, known within the industry as Circular 12, relate to life insurance and family takaful insurance will introduce a 4.5% commission cap on the sale of lump sum portfolio bonds or offshore bonds.
Some insurance companies operating in the UAE had privately voiced concerns that the initial six months period was too quick and that a longer period was necessary to effectively implement the IA's decision.
Yesterday Friends Provident International launched two revised BOD-49 compliant products ahead of the new legilsation coming into force. The company's head of sales, Stuart Shilcock, said: "The transitional period will not be without its challenges but, ultimately, the regulations will mean better outcomes and even greater protection for our policyholders."
The reform's implementation comes following a six-month delay due to distruption from the covid-19 outbreak.