Insurance Authority Dispute Resolution Committees – Update

On 15 July 2019, the Insurance Authority (“IA“) published Board Resolution No. 33 of 2019 Concerning the Regulation of Committees for the Settlement and Resolution of Insurance Disputes (“Regulations“).

The Regulations provide detailed guidance on the operation of the new dispute resolution committees (“Committees“) launched by the IA. In our earlier Briefing, The Evolution of Insurance Related Dispute Resolution in the UAE, we discussed how the power to form such Committees was granted to the IA pursuant to Article 110(2) of Federal Law No. (6) of 2007 (as amended).

In this Briefing, we highlight some of the key provisions of the Regulations which will be of interest to insurance practitioners in the UAE.

Formation of Committees

The Committees are to be made up of at least three persons – one chairperson (possibly a judge) and two or more members of the Insurance Authority. The Committee members will be specialised in and will have jurisdiction to hear all insurance related disputes, regardless of value.

However, the Committees are not empowered to deal with the following:

• Urgent applications and provisional attachment orders;
• Disputes filed with the courts before the Regulations came into effect; and
• Disputes subject to an arbitration clause.

The Committees will predominantly sit in Abu Dhabi and Dubai; however, there is scope to conduct sessions in other Emirates when required.

The language of the Committees will be Arabic. Any submissions from non-Arabic speaking parties will need to be heard through a translator, who must swear an oath before the Chairman in advance.

The Procedure

Once a claim has been submitted under an insurance policy, the insurer must address that claim in accordance with the applicable law and the provisions of the insurance policy.

The Regulations then set out a 3 stage process for resolution of any dispute arising from the insurer’s decision:

1. First, the claimant is required to file a complaint, electronically via the IA website, along with any relevant supporting documentation. The IA will then request the insurer to provide an explanation for their decision within 5 working days. The claimant may object to the insurers’ objections and ask the IA to refer the dispute to a Committee.
2. Second, a Committee will be assigned to the dispute within three working days, which will, as a first step, attempt to settle the dispute amicably through conciliation. The Regulations require the Committee to settle a dispute within 15 working days, which appears to commence from the date the application was originally filed by the claimant, although this may be extended by agreement of the parties or by the Committee.
3. Third, If the dispute is not settled by conciliation, the Committee will commence the dispute resolution procedures under the Regulations. On receipt of all relevant documentation, the Committee has 20 working days to issue their decision, although again this may be extended, if necessary.

Other key provisions of the Regulations relating to the dispute resolution stage are set out in brief below:

• Any appeal against the decision of the Committee must be filed with the court of first instance within 30 days of notification of the Committee’s decision.
• The Committee has the power to seek the assistance of consultants, loss adjusters and other experts, registered with the competent authorities.
• The Committee has the power to award costs in whole or in part to either party as the case may be.
• Photocopies of documents are permitted in proceedings and a party may not dispute the authenticity of a document merely on the basis that it is a copy. This mirrors the recent amendments made to the UAE Civil Procedure Code by Cabinet Decision No. 57 of 2018.

The Regulations will come into force within 3 months of their publication in the official gazette (i.e. by October 2019), by which stage, we expect the new Committees to be fully operational.

Whilst it remains to be seen how the new system will operate in practice, on the face of it the Regulations have the intention of fundamentally altering how insurance related disputes in the UAE are handled and resolved. We would therefore recommend to our clients that they become familiar with the Regulations and the new procedures it seeks to put in place.

For further information on the above, please contact the authors or your usual HFW contact.

Luke Garrett
Senior Associate
D +971 4 423 0510
E luke.garrett@hfw.com

Shane Gibbons
Associate
D +971 4 423 0574
E shane.gibbons@hfw.com