On 15 February 2025, the United Arab Emirates enacted a major reform of its insurance brokerage sector through the entry into force of the Insurance Brokers Regulation 2024, issued by the Central Bank of the UAE (CBUAE) under Resolution No. (18) of 2024. The new framework replaces the previous 2013 regulation and introduces a significantly more structured and compliance-driven regime for insurance brokers operating onshore in the UAE. The regulation does not apply to entities licensed in financial free zones such as DIFC or ADGM.
The overarching goals are clear: increase transparency, reduce conflicts of interest, enhance governance, and ensure better consumer protection. The regulation provides detailed guidance on licensing, operational conduct, financial controls, outsourcing, data protection, and disciplinary procedures.
I. Key Changes: Payment Flows, Remuneration Rules, and Compliance Obligations
A central change under the new regulation is the strict prohibition of insurance brokers from collecting or handling any insurance premiums or claim payouts (Art. 18). All payments must now be made directly between the policyholder and the insurance company, eliminating risks related to delays, misuse, or commingling of client funds.
In return, insurers are now obliged to pay commissions to brokers within ten business days of receiving the premium (Art. 23(2)). Where premiums are paid in instalments, the broker’s commission must be proportionally disbursed accordingly. In a move to increase market integrity, brokers are also explicitly prohibited from offering discounts to clients out of their own commissions (Art. 25). Only insurers are permitted to offer pricing concessions, thereby ensuring that price competition does not undermine the professional and advisory quality of brokerage services.
Governance requirements have also been strengthened. According to Articles 26 to 34, brokers are not permitted to act in any other capacity within the insurance distribution chain (e.g., as an agent or a related broker) and must remain free from any economic relationship that would impair their independence (Art. 27). In addition, they are subject to new internal controls, conflict-of-interest policies, and compliance structures.
A further innovation is the mandatory localisation of all personal and policyholder data. According to Art. 29(2), brokers must store data within the UAE only, and must retain secure, verifiable backups for at least ten years. The outsourcing of core functions – such as compliance, accounting, or IT systems – is now subject to prior approval by the Central Bank (Art. 32), and offshore outsourcing is categorically prohibited.
On the financial side, brokers are required to maintain fully paid-up equity capital at all times (Art. 9 ff.). Bank guarantees or letters of credit are no longer accepted as a substitute for equity capital. Additionally, foreign-headquartered brokers operating branches in the UAE must meet local capital requirements independently of their group structures (Art. 10(4)).
II. Market Implications: Consolidation and Professionalisation Expected
The 2024 Regulation represents a fundamental reshaping of the UAE insurance intermediary landscape. For smaller firms, the enhanced capital, data, and governance requirements may pose a challenge, potentially leading to market consolidation. Larger and well-organised brokerages, by contrast, will be well-positioned to thrive in an environment that rewards professional conduct over aggressive pricing tactics.
Insurance companies must also adapt by restructuring commission systems, streamlining direct premium collections from clients, and implementing robust data exchange and reporting mechanisms. As intermediaries lose their payment-handling function, insurers take on greater regulatory responsibility for direct financial interactions.
This regulation forms part of a wider trend toward enhanced regulatory compliance and financial transparency in the UAE – a development underscored by the country’s removal from the FATF Grey List in February 2024. For policyholders, the outcome is a more secure, transparent, and internationally aligned insurance market.
