In light of the digital transformation and the artificial intelligence era, the adoption of technology in the insurance industry has become a necessary and collective requirement by the parties of the insurance process, whether by companies in terms of reducing administrative costs and expenses, or by the public, policyholders and insurance beneficiaries in terms of access to insurance services easily and conveniently.

This matter has become imperative for the economy in any country. Insurance is an effective factor in the vital economic activities. Any progress in the insurance sector will reflect positively on economic development as a result of the direct link between both fields. 

In this field the electronic insurance has become prominent. The electronic insurance is a business that the company practices using electronic or smart systems such as insurance coverage offers, insurance premiums, selling and marketing insurance policies, collecting premiums, receiving and handling claims and complaints.

Given that electronic insurance has become a means or a channel to keep pace with technological advances, the legal regulation of electronic insurance has also become a necessity required by the business, which is full of risks, especially for owners of investment companies.

To this end, the UAE Insurance Authority issued Resolution No. (18) of 2020 concerning the Electronic Insurance Regulations dated 27 April 2020. The provisions of this resolution apply to all electronic and smart insurance operations carried out by insurance companies, insurance related professions, as well as marketing insurance policies through banks, to the extent consistent with their nature.

The resolution sets the application of the provisions contained in the federal law on electronic commerce and transactions and other laws in force related to the conclusion of insurance contract electronically and any related matters to electronic insurance operations. Further, insurance companies and insurance related professions will be committed to the application of information security standards issued by the competent authorities.

Insurance companies and insurance related professions, prior to submitting an application to the Insurance Authority to approve the practice of electronic insurance operations, have to develop a specific action plan for electronic insurance operations approved by the Company’s Board of Directors. This plan should include; an analysis of the projected volume of electronic insurance operations for the next three years and an analysis of the risks associated with electronic transactions and the necessary precautionary measures and procedures to mitigate those risks, such as, risks of cyber security, risks of adverse selection, money-laundering and terrorist financing offenses in insurance activities. As well as, a contingency plan, including the actions that should be taken in case one or more element of the electronic or smart system are disrupted. This plan should include the corrective measures to ensure continuity of business. 

The resolution sets the rules of selling the insurance policy and obliges companies to obtain the approval of the Insurance Authority on the types of insurance products that will be sold through its website and to be committed with certain conditions. In addition to other obligations relating to transparency, disclosure, security and safety of electronic information. Moreover, according to the provisions of this regulations, companies and insurance related professions are committed to rectify their conditions within 6 months as from the effective date. 

Certainly, the electronic insurance regulations will contribute to enhancing the competitiveness of the domestic insurance market and developing its performance and business, based on the numerous advantages that characterize electronic insurance operations, and the comprehensive provisions contained in the electronic insurance regulations issued by

the Insurance Authority.

Ebrahim Obaid Al Zaabi

 Director General of Insurance Authority