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According to the experts, the latest update in the regulations is more firm than the previous ones. The new regulations for family takaful and life insurance are expected to see more disclosure for customers. The commission caps applied to the protection products sale including the fixed-term savings plans would be larger too.
Clearly, the focus of these regulations for life insurance in UAE is to protect the policyholders. The aim is to make sure that they get the value for their funds from the policy they buy.
There are various residents of the Emirates who have been burnt by purchasing lump-sum products or long-term savings that are sold by the independent bank or financial advisors, which offer attractive returns. However, the early gains are eaten up by the commission fee charged. Moreover, they are not allowed to exit the policies without making payment of the full product charges.
Another change would be seen in the refunds or rebates received by a distribution channel like a financial advisor or the insurer from a third party. These refunds or rebates should be paid to the policyholder and not retained by the distribution channel or the insurer.
These life insurance regulations emphasize on greater transparency and clarity in the selling of products & services along with the remuneration alignment throughout various products.
The financial services in this region are finally transforming into a profession, which is in alignment with the needs and objectives of the investors from a commission-based and product-driven industry.
To Sum Up!
The new regulations for the life insurance in UAE are drafted with a view to reducing the complaints of the policyholder. The main aim is to provide the customers with a clear, transparent, and smooth insurance experience such that they get the money value from the policy they have purchased.