Insurance Business means the business of accepting risks by effecting or carrying out contracts of insurance, in both the life and non-life sectors, including contracts of reinsurance and captive insurance arrangements.
Core Income Generating Activities
• Predicting and calculating risk
• Insuring or re-insuring against risk and providing Insurance Business services to clients
• Underwriting insurance and reinsurance
Special Points to Consider
- To prevent duplicate reporting, Licensees providing captive insurance services are not also considered engaged in a Distribution and Service Centre Business.
- Out of scope: Insurance brokers, agents, and other UAE businesses providing insurance related services that do not involve assuming all or some of the insured risk do not fall within the definition of Insurance Business, although they may conduct activities that fall into another Relevant Activity category.
- Insurance Authority UAE
- Competent Authority in Financial Free Zone
- Competent Authority in Free Zone
What licensee has to do?
- File notificationwith the regulatory authority before due date.
- Only Licensees that earn income from a Relevant Activity during the relevant financial period and that are not exempt from the Regulations are required to demonstrate economic substance in the UAE and file an economic substance return. Economic substance returns must be filed within 12 months from the end of the relevant financial period.
Who has to file the notification?
The provisions shall apply to a Licensee that carries out any Relevant Activity. However, the notification form will be the way to confirm to the “Regulatory Authority” whether your company has carried out any relevant activity during the reportable financial year or not.
Hence, filing of Notification is mandatory for all the Licensees and Exempted Licensees.
Failure to comply with regulation:
- Penalties between AED 20,000 to 400,000
- Exchange of information with foreign competent authority
- Suspension or withdrawal or cancellation of license