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UAE Introduces BIDRU under New Insurance Laws

The IDC has helped to shape the new UAE insurance regulations by establishing the Banking and Insurance Dispute Resolution Unit.

The Insurance Settlement Dispute Committee (IDC) has transformed the new UAE insurance laws, establishing the Banking and Insurance Dispute Resolution Unit (Bidru). 

This independent juristic entity is tasked with receiving and resolving complaints against insurance companies and settling disputes arising from insurance contracts, works, and services.

Bidru’s Jurisdiction and Decision Appeals:

Bidru, created as part of the new insurance laws effective November 30, 2023, holds the authority to receive and resolve complaints. 

Notably, insurers cannot appeal Bidru’s decisions if the claim value does not exceed 50,000. For claims exceeding this threshold, insurers have a 30-day window to appeal the unit’s decision before the Court of Appeal.

Streamlined Dispute Resolution Process:

Sam Wakerley, Head of Insurance and Reinsurance at Holman Fenwick Willan (HFW) in the Middle East, views Bidru as an equivalent to the UAE Court of First Instance. 

The introduction of Bidru is seen as a positive step in streamlining the stages required for reaching a final, binding judgment in insurance claims, enhancing the efficiency of the dispute resolution process.

Changes in Insurance Regulatory Landscape:

The new insurance laws also changed the regulatory landscape, replacing the Insurance Settlement Dispute Committee and Emirates Insurance Association with Bidru and the Emirates Insurance Federation, respectively. 

The Emirates Insurance Federation will now operate under the supervision of the UAE Central Bank, marking a shift in regulatory oversight.

Central Bank’s Intervention Powers:

Article 104 of the new insurance laws empowers the Central Bank to intervene in lawsuits involving insurance companies, reinsurance companies, or insurance-related professionals. 

The Central Bank, upon notification of a lawsuit, may provide clarifications, data, or information to the competent authority based on its investigation into the matter.

Applicability and Exemptions:

The new insurance laws apply to companies operating in non-financial free zones and onshore UAE, excluding companies in financial free zones. 

While the 2007 Insurance Law did not differentiate between free and financially free zones, the new law clarifies that companies licensed in financially free zones may only conduct business within these zones, except for reinsurance activities.

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