Published: March 2023
In 2020, the UAE Insurance Authority merged with the Central Bank of the UAE (CBUAE), thereby creating a unified regulator for insurance and banking sector. In November 2022, the CBUAE issued a notice setting out its initiatives undertaken for the insurance sector which included establishment of Ombudsman Unit and earlier this week the CBUAE has issued a regulation titled Regulation Concerning the Establishment of Ombudsman Unit in the UAE (“Ombudsman Regulation”).
The Ombudsman Unit is called “Sanadak”, which is an Arabic expression to means “Your Support”, and the goal of Sanadak is easy access and quick turnaround on consumer complaints.
The Ombudsman Regulation primarily establishes an Ombudsman Unit which would acts as a financially and administratively independent unit, equipped with the authority and power to receive, handle, review and resolve complaints in a thorough, timely, transparent, fair, and legally sound manner. The Ombudsman Regulation sets out detailed process on complaint handling mechanism along with details on who can file a complaint, type of complaints that fall within the scope of the Ombudsman Regulation, Annual fees payable by the Licensed Financial Institutions (LFIs) and Insurers and so on. The Ombudsman Regulation include provisions on the internal governing structure including the management, functions, employees and the delegation of powers.
In terms of insurance disputes, currently any insurance dispute needs to be referred to Insurance Dispute Resolution Committee (IDRC), and going forward, all complaints/disputes must first be sent to the insurance companies and if not resolved to the Ombudsman Unit. To appeal the decision of Ombudsman Unit in relation to insurance disputes, the jurisdiction for such appeal lies with IDRC, and therefore IDRC will continue to operate as a body, albeit with revised jurisdiction. For appeal of decisions relating to LFIs, similar role will be played by Unit’ Appeal Committee to be set up under the Ombudsman Regulation.
The Ombudsman Unit will be eligible to accept complaint against LFIs and Insurers in relation to provision of service or product or an offer to provide a service or product by insurance companies, or their failure to provide a particular service, product requested by the complainant due to arbitrary reasons, or a financial loss or harm to the complainant through any deception, misleading, fraudulent, or unfair conduct by or on behalf of the LFIs and Insurers. The complainant can be an individual, sole proprietor or small to medium enterprises, as defined in the Ombudsman Regulation.
Effective date
The Ombudsman Regulation shall be published in the Official Gazette and shall be considered effective one month from the date of publication. The Unit will be operational as of one year from the date of publication of the Ombudsman Regulation.
How Al Tamimi & Company can help?
The Ombudsman Regulation marks a radical shift in the consumer dispute resolution process which will impact the manner in which LFIs and Insurers handle their complaints and disputes/grievances. One of the requirements is that before approaching the Ombudsman Unit the customer must have complained to the LFIs and Insurers and 30 days must have passed from the date of such complaint. It is therefore crucial to review the internal complaints handling framework maintained by the LFIs and Insurers. The team at Al Tamimi & Co is well placed to advice on the Ombudsman Regulation, carry out an impact analysis, assist with developing system to manage the complaints and ongoing legal and compliance requirements arising thereof.
Key Contacts
Divya Abrol Gambhir
Partner
d.abrol@tamimi.com
Anand Singh
Senior Counsel
a.singh@tamimi.com
Ali Awad
Senior Counsel
a.awad@tamimi.com
Sarah El Serafy
Senior Associate
s.elserafy@tamimi.com