The Regulatory Imperative for Proper Insurance Licensing in the UAE
With a number of new regulations issued and others in the pipeline, the UAE insurance regulatory landscape has entered a pivotal new phase. With the enactment of Federal Law No. 6 of 2025, the Central Bank of the UAE (CBUAE) has consolidated regulatory oversight over both banking and insurance activities under a single federal framework. Whilst this has limited bearing on existing license holders, it carries immediate and significant implications for insurance-related entities operating without proper license or through licenses issued by non-financial free zones, most notably post 31 December 2025.
Consolidation of regulatory oversight
Federal Law No. 6 of 2025 replaces Federal Law No. 48 of 2023 and represents a fundamental restructuring of financial services supervision in the UAE. Until few years ago insurance was regulated by Insurance Authority, until this was merged with the CBUAE, and now the new law integrates banking and insurance supervision within a single regulatory perimeter under the CBUAE.
The Federal Law No. 6 of 2025 substantially strengthens the sanctions regime for unauthorized financial activities. Engaging in any licensed financial activity without a license/authorization is punishable by imprisonment and a fine of not less than AED 50,000 and not exceeding AED 500 million, or by either of these two punishments.
Who can carry out insurance business
Federal Law No. 6 of 2025 applies to all financial institutions, including insurance and persons engaged in such business, but does not apply to “Financial Free Zones in the State and financial institutions regulated by the authorities of such zones.”
No person (legal or natural) may carry out any “Licensed Financial Activity” without obtaining the required license. Licensed Financial Activity for the purpose of insurance means insurance, reinsurance, and Insurance-Related Professions business and services, including Takaful and Re-Takaful insurance business and services. Insurance Related Professions is defined to include Insurance Agent, Insurance Broker, Surveyor and Loss Adjuster, Insurance Consultant, Actuary, Health insurance TPA, or any other profession related to insurance as determined by the Central Bank.
Therefore, insurance business in the UAE, can only be carried out by those licensed by either the CBUAE (for onshore UAE and for non-financial freezones) or by the licensing authority of the financial freezones (for financial freezones).
Why free zone classification matters
The distinction between financial and non-financial free zones is fundamental to understanding the application of the new law. Financial free zones, Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) operate under independent legal and regulatory systems. Insurance activities conducted from and within these jurisdictions fall outside the CBUAE’s remit and are regulated by their respective authorities.
All other free zones, however, are classified as non-financial free zones. This includes DMCC, JAFZA, SAIF Zone, RAKEZ, Meydan, and all other free zones outside the financial free zone framework. It is now expressly confirmed that insurance related activities carried out in these freezones are subject to the Federal Law No. 6 of 2025 and oversight of CBUAE, meaning that a CBUAE authorization/no-objection is mandatory.
What happens to entities in non-financial freezones
While this has long been the legal position under federal laws, on 1 July 2024, DMCC reinforced this position by issuing a circular requiring all entities licensed for insurance-related activities to obtain a No Objection Certificate (NOC) from the CBUAE. The requirement applies across a broad range of activities, including insurance and reinsurance brokerage, insurance consultancy, and claims-related services. The DMCC circular provided a transition period ending on 31 December 2025. Any DMCC entity carrying on insurance-related activities without the NOC from CBUAE is now in breach of DMCC requirements as well as the federal laws, including Federal Law No. 6 of 2025. Similar directives have been issued by other non-financial free zones to entities conducting insurance activities within their jurisdictions.
Entities in non-financial free zones that have been unable to secure the requisite authorization or NOC from the CBUAE must reassess their operations and consider alternative licensing pathways, in the DIFC/ADGM or under CBUAE, depending on the business activity and target customers.
Key Takeaways
Federal Law No. 6 of 2025 signals a markedly strengthened regulatory posture. Given the CBUAE’s demonstrated commitment to enforcement action against Licensed Financial Institutions, including insurers and brokers, non-compliance now carries substantial risk of regulatory consequences. Entities operating without proper authorization should take immediate steps to regularize their position, both to mitigate regulatory exposure and to preserve their ability to lawfully participate in the UAE insurance market.
How Can Al Tamimi Assist
Their team is currently advising numerous entities on re-domiciliation from non-financial free zones to regulated jurisdictions, including DIFC, ADGM, and onshore UAE under CBUAE supervision. Leveraging their regional presence and specialized regulatory expertise, they provide comprehensive support throughout the licensing and compliance process, from initial application to ongoing regulatory engagement.
Key Contacts
Anand Singh, Legal Director, a.singh@tamimi.com
Veena Shankar, Associate, v.shankar@tamimi.com