UAE Central Bank removes insurance company’s board of directors

Regulator appoints temporary committee for six months to carry out business at unnamed company

The UAE Central Bank has introduced a number of measures to regulate the financial sector in recent months. Photo: Central Bank of UAE

The UAE Central Bank has removed the board of directors of an insurance company operating in the country, as it cracks down on regulatory violations.

A temporary committee of experts will replace the board for six months, said the banking regulator in a statement on Tuesday.

This administrative sanction was imposed in accordance with Article 41 of Federal Law No (6) of 2007 on the Regulation of Insurance Operations.

The regulator neither named the insurance company nor identified the nature of the violation.

“The committee will carry out business and dispositions on behalf of the company in accordance with its mandate,” the Central Bank said.

This comes as the UAE Central Bank takes strict measures to combat regulatory violations – including money laundering and the financing of terrorism.

In December, it issued new guidelines for licensed financial institutions operating in the insurance sector.

These will help financial institutions enforce their statutory anti-money laundering and countering the financing of terrorism obligations.

The guidelines discuss money-laundering and financing of terrorism risks relevant to life insurance and other investment-related insurance products, and how insurance operators can identify, assess, manage and mitigate them.

Through its supervisory and regulatory mandates, the Central Bank works to ensure that all insurance companies and professions related to insurance companies comply with the UAE laws and regulations “to safeguard the transparency and integrity” of the industry and the financial system, it said.

The banking regulator has unveiled a number of initiatives in recent months to further improve regulatory oversight of the financial sector.

These include an enhanced regulatory framework to supervise banks’ exposure to the property sector and issuing guidelines to help licensed exchange houses to combat money laundering and the financing of terrorism.

In 2021, the regulator also instructed all hawala providers – informal fund transfer agents operating outside the banking system – to register with it, in an effort to strengthen oversight of money transfers.