Holborn Assets chief executive, Bob Parker told International Adviser that, following a visit from its regulator, the Insurance Authority – its first in 15 years, it had taken the decision to suspend its terms with the companies in order to “meet the letter of the law”.
In a statement, Parker said: “Following a recent visit from the Insurance Authority of the United Arab Emirates, Holborn Assets one of the UAEs largest financial advisory companies, has temporarily suspended business to RL360°, RSK [Skandia], Standard Life and Hansard.
"The Insurance Authority has recently appointed a new director general H.E. Ebrahim Obaid Al Zaabi, who is proactive in the regulatory market, the recent visit by the Insurance Authority inspectors was the first in 15 years.
“Although Skandia, RL360° and Standard Life do not have the appropriate Insurance Authority licence they all have UAE licences of one form or another and are known to be active in the UAE market by all the authorities. The action taken by Holborn Assets is necessary to meet the letter of the law while Skandia, RL360° and Standard Life aim to finalise their respective negotiations with the regulators. Holborn understands that all companies are in advanced talks with the Insurance Authority and other UAE regulators.”
Holborn was very clear it will continue to use the products of the companies impacted, outside of the UAE “where possible”.
Holborn is not the only intermediary in the UAE to have decided to stop selling products offered by firms not licensed by the Insurance Authority.
AES International chief executive Sam Instone said he had taken the decision not to sell products from non-Insurance Authority licensed firms “some time ago”, while Globaleye chief executive Tim Searle said he had discussed the issue with the companies concerned and had since “ensured [Globaleye’s] product offering is purely in-line with those which are licensed in the UAE”.
Licensing complexity
Regulation in the UAE is complex and is arguably made more so by the fact that the Insurance Authority has had a moratorium on providing new licences in place since 2008.
There is some speculation this moratorium may be lifted in November this year when new regulations are enforced.
However, the six years in which it has been in force as led to a rise in the number of unlicenced brokers operating in the UAE and has also meant providers looking to open in the country have had to find other ways to legitimately operate. This includes Standard Life International – which opened in the Dubai International Financial Centre, Skandia International, RL360° and Hansard who all entered the market after the 2008 moratorium was imposed.
Before the moratorium, a number of insurance companies were granted licences to conduct insurance business within the UAE, including Zurich International Life, Friends Provident International and Generali.
Skandia and RL360° both said they support the regulator’s decision to offer more clarity and certainty to the market for customers.
More specifically, Skandia said a “greater choice would deliver better customer outcomes”, alluding to the moratorium, and added it is in discussions with the IA “regarding the recent guidance issued to advisers in the region”.
RL360° meanwhile, added it had been told by its local sponsors and contacts “the moratorium will be lifted” and said it really wants to work alongside the IA.
A spokesperson added that it will continue to use its commercial licence which allows it to have a representative office and to conduct “pre-sales activity” within the UAE. Commercial licences are granted by the Department of Economic Development of the Government of Dubai.
Standard Life, with its base in the Dubai International Financial Centre, is regulated by the Dubai Financial Services Authority.
It said: “Standard Life is aware there has been market commentary in connection with actions taken by the UAE Insurance Authority, in connection with the activities of some of its regulated firms. In the first instance we will be discussing this with our own regulator, the DFSA, before engaging with the UAE Insurance Authority directly.
“We are confident of our position in the market and recommend individual brokers seek their own consultation with the regulator. In all markets, we take extensive legal advice and work very closely with country-based regulators to establish our license and sphere of regulated activities.”
Hansard, which has recently announced a big push to re-establish itself as a significant player in markets like the UAE, said the decision “does not really affect us as we currently do business with clients resident outside of the UAE”.
