1. These Instructions are called Instructions Concerning the Regulation of Insurance Agents Business and they shall be referred to hereinafter as "the Instructions"
    
2. The following words and expressions, wherever used in these Instructions shall have the meanings ascribed thereto below, unless the context otherwise requires:
    

In the application of the provisions of this Resolution, The following words and expressions shall have the meanings ascribed thereto hereunder, unless the context otherwise requires:

The approved special forms for practicing of the Insurance Brokerage activity in the UAE shall be as follow:

1. Insurance Broker License Application Form.

2. Insurance Broker License Renewal Application Form.

3. Insurance Broker Branch Registration Renewal Application Form.

4. Registration Data Amendment Annotation Application Form.

5. Insurance Broker Employee Accreditation Application Form.

6. Application Form to Add a New Insurance Type / Class to the Broker License.

7. Insurance Broker Branch Opening Application Form.

8. Bank Letter of Guarantee Form.

9. Written Undertaking Application Form.

For the Insurance Authority to accredit the incumbent of one of the following positions with the insurance broker, it is required that he must meet the conditions set forth against each position as follows:

I. The following qualifications and experience must be met:

1. Director General or CEO:
    
   1. Hold a university degree or equivalent, or the ACII certificate accredited by the Chartered Insurance Institute of London, or a certificate accredited by a similar professional institute.
       
   2. Have successfully passed (3) training courses in insurance or insurance brokerage.
       
   3. Have a minimum practical experience of 10 years in insurance/ insurance brokerage, and no less than 5 years if he holds a higher academic qualification. The experience requirement for a UAE national shall be a minimum of 5 years’ experience and 2 years’ experience if he holds a higher academic qualification.
       
2. Operations Manager
    
   1. Hold a university degree or equivalent in financial sciences, accounting, management sciences, banking or law, as a minimum.
       
   2. Have a minimum practical experience of 6 years in insurance/ insurance brokerage, and no less than 3 years if he holds a higher academic qualification. The experience requirement for a UAE national shall be a minimum of 2 years’ experience, and 2 one year experience if he holds a higher academic qualification.
       
3. Internal Controller
    
   1. Hold a university degree or equivalent in a financial, accounting or law field as a minimum, or an accredited professional financial certificate approved by the Insurance Authority.
       
   2. Have practical experience in internal or external audit, and had previously taken part in the audit of insurance companies or brokerage business in no less than 3 years, or 2 years if he holds a higher educational qualification or if he is a UAE national.
       
4. Professional Employees
   
   The broker must have at least one specialized professional for each licensed insurance type / class. Each such professional must meet the following requirements:
    
   1. Hold an accredited university degree.
       
   2. Have a minimum practical experience of 5 years in the field of the licensed type or class of insurance/insurance brokerage. The experience requirement for a UAE national shall be a minimum of 3 years’ experience in the said fields.
      
       
5. Branch Officer
    
   1. Hold a university degree or equivalent, or the ACII certificate accredited by the Chartered Insurance Institute of London, or a certificate accredited by a similar professional institute.
       
   2. Have a minimum practical experience of 7 years in insurance/ insurance brokerage, and no less than 3 years if he holds a higher academic qualification. The experience requirement for a UAE national shall be a minimum of 4 years’ experience or 2 years’ experience if he holds a higher academic qualification.

1. II. Academic degrees must be accredited as equivalents by UAE Ministry of Higher Education and Scientific Research.
    
2. III. Candidates must pass the examinations prescribed by the Insurance Authority.
    
3. IV. No candidate should have been dismissed from any entity for disciplinary reasons.
    
4. V. Each candidate must be practice the profession on full time basis.
    
5. VI. The accreditation application must be submitted on the form prepared for this purpose and must enclose all documents, data and information supporting the application. Any other documents, data or requirements requested by the Insurance Authority must be provided.
    
6. VII. Restrictions on practicing the approved functions:
    
   1. It is impermissible to start practicing any functions described above prior to the accreditation by the Insurance Authority.
       
   2. It is impermissible to combine two approved jobs at the same time.
       
   3. The internal controller may perform the duties of internal auditor for the company in addition to his prescribed duties after obtaining the Insurance Authority’s approval.

Any letter of guarantee should be issued by one of the banks operating in the UAE in favor of the Insurance Authority using the approved form, and must be unconditional or restricted, payable at any time upon request by the Insurance Authority, irrevocable unless under a written consent by the Insurance Authority and automatically renewable annually.

The insurance broker shall maintain the required solvency to practice his/its activity, and shall ensure the continuous performance of his/its obligations in accordance with the following rules:

1. The broker shall maintain the solvency required to pay all his/its liabilities once due without resulting in his/its default or in compromising his/its financial position.
    
2. In all instances, the value of the broker’s existing assets must be in excess of his/its liabilities in order to enable him/it to continue the practice of his/its activity and ensure the continuous performance of his/its liabilities.
    
3. The excess in the value of the broker’s existing assets over his/its liabilities shall represent his/its available capital.
    
4. At all times, the broker’s available capital may not be less than his minimum capital prescribed in the Regulations.
    
5. The broker shall report to the Insurance Authority immediately upon the occurrence of any failure to maintain the minimum capital and will be given a grace period of 15 days to submit a detailed plan to fulfill the minimum required capital. In case of failure to fulfill the minimum required capital within 30 days after the plan submission date to the Insurance Authority, the Insurance Authority may temporarily suspend the broker’s business.
    
6. The broker shall ensure that his/its annual and interim financial reports include a clear description for all necessary data and information related to his/its solvency, as well as his/its strategy, systems and goals in managing risks associated with his/its financial position (including a detailed breakdown of receivable and payable aging and balances, as well as revenues from premiums and commission for each company).
    
7. The broker shall provide the Insurance Authority with the risk general management framework statement, which shall include the internal procedures to assess his/its solvency as commensurate to the risks that his/its financial position may be exposed to and his/its strategy in capital allocation to counter such risks.
    
8. The broker must strictly adhere to the payment of amounts received form the customers to the concerned insurance companies in due dates.
    
9. The broker shall maintain liquid assets or assets convertible to liquid money within a period of no more than two weeks to cover at least 100% of all short term liabilities.
    
10. The board of directors or the management board of the broker shall approve a financial and accounting policy for receivable collection. Such policy shall include all required procedures to collect receivables of all forms including the related party receivables.
     
11. The broker must record all of his/its assets in the company's name and shall immediately inform the Insurance Authority in the case of any mortgage or seizure imposed on any such assets.
     
12. The broker shall incorporate in his/its internal control procedures an effective mechanism and implementable administrative and financial procedures to manage and control risks that may be encountered in the manner commensurate with the nature and size of his/its activities.

The broker must submit a training and Emiratization plan along with the license application.

The broker may request the closing of a branch. The Insurance Authority shall issue its decision to approve such closure within 20 work days from the date of submitting the complete application to the Insurance Authority provided that the broker adheres to the following:

1. Submit an application for data amendment annotation in the Register.
    
2. Any party with interest shall have the right to object to the branch closure within one month from the date of publishing the announcement in two local widely-distributed newspaper issued in the UAE, one of them in Arabic. Such objection shall be submitted to the competent authority and the Insurance Authority with the reasons thereof and including all data and rights due from the broker. The branch closure application may not be approved except after the reasons for objection to the closure are elapsed by consent or by court order.
    
3. The broker shall continue the normal practice of his/its activity until the issuance of the approval decision to close the branch by the Insurance Authority and the competent authority.
    
4. For a foreign broker branch or a broker established in the UAE free zones, a proof that the parent company has actually approved the branch closure, provided that such proof must be translated in Arabic and certified.
    
5. The bank guarantee shall be released after 3 months from the date of the Insurance Authority’s approval of the closure, cancelation of the associated license and ensuring that there are no liabilities are owed by the branch to the Insurance Authority, companies and customers arising from its insurance brokerage practice.
    
6. Notify the relevant competent authorities of the branch closing decision.

The forms attached to this Decision shall be an integral part thereof and shall be read therewith.

All concerned parties must implement this decision, and shall become effective on the date of its issuance.

The procedures and processes of internal control have evolved from traditional methods to modern methods that are emanating from international professional associations that have established international standards for compliance processes in terms of planning and implementing internal control activities. The internal auditor's efforts are focused on the most critical and important areas of the company. Insurance brokerage is one of the most required companies to implement internal control and auditing procedures for the purpose of providing effective services and results based on a strong qualitative service delivery system, Also, seeking effective ways to ensure sound decision, minimize manipulation, embezzlement, fraud and all the risks encountered by insurance brokers.

The job of the Internal Controller in the insurance companies and insurance brokers is one of the new jobs being created. The job description of the Internal Controller can be summarized as following:

•To carry out internal control functions as an organized and systematic activity that is objective and aims at adding a participatory value in achieving the objectives of the institution.
•The Internal Controller must be fully independent in the institutional organization in order to be able to carry out the tasks entrusted to him.
•The Internal Controller provides assurance regarding the assessment and effectiveness of risk management, internal control systems of the company, governance and compliance with policies and regulations.

Thus, the internal auditor's task can be summed up by making sure that the insurance broker's bushiness and procedures taken in certain fields of insurance activity are consistent with the provisions of the laws issued in the State in general and with the laws, regulations, instructions and decisions issued by the Insurance Authority in particular. He is also responsible for providing information, data and documents required by the Insurance Regulatory Authority in respect of those particular fields.

The Authority affirms that it is the responsibility of the senior management to take all necessary measures to ensure the continuity of the internal auditor's work, especially in terms of providing information and data and facilitating the work of the internal auditor, and emphasizes the need for the Internal Controller to prove in his work a high degree of professionalism and objectivity. So that the Internal Controller would be disentangled from any interests that would affect his judgments and make it biased.

•Continuity: the Internal control activities should be consistent and sustainable in terms of carrying out their tasks and duties. For this purpose, senior management is responsible for taking all necessary measures to ensure the continuity of the internal auditor's work, especially in providing information and data and facilitating the work of the internal auditor.
•Independence: The independence of the Internal Controller requires that his organizational subordination should be to the highest level of executive management and has direct communication with this level. It is also necessary for the independence of the internal auditor, not to be the decision maker in setting policies and procedures (it is possible to contribute to the company's team) or perform another executive work in the company.
•Integrity: The Internal Controller must be free from the intellectual subordination of the Management, make high professional care in carrying out all the internal control work, and the Internal Controller should act in the interest of the institution, not in contradiction with the ethical values of the profession.
•Objectivity: The Internal Controller must demonstrate in his work a high degree of professionalism and objectivity so that the Internal Controller is disentangled from any interests that would affect his judgments and make it biased.

•The internal control program is the work plan of the Internal Controller to review the registers and books and the data contained therein and review it to implement the written policies and procedures and to be in conformity with the laws, regulations and instructions issued by the regulatory authorities. This plan also contains the objectives to be achieved and the steps to be taken in order to achieve these objectives, the specified time to finish each step, and the person responsible for the implementation. The program achieves several objectives as a control and planning tool by which the auditor can track the monitoring process and the number of hours spent in each process. It is important to take into consideration in designing the internal audit program the following:

• The efficiency of the internal control system in the insurance brokerage company and based on the degree of efficiency, the scope of the internal audit, control and control process is determined.
• Objectives to be achieved because internal audit is a means, not a goal, hence, the program must enable the achievement of those objectives.
• Use the means of review and control that enable the auditor to obtain strong evidence in their validity. "To follow the audit methods that are appropriate to the
  circumstances of each case, each facility has its own circumstances against which
  the Internal Controller prepares the appropriate observer program.
• Types of audit programs:
• "It is not possible to develop a unified program for auditing and inspection of all types to be applied to different or even similar establishments because of the different circumstances of each brokerage company that distinguish them from others." In general, there are two types of audit programs:

1. Periodic and fixed or pre-determined audit programs.
2. Emergency inspection programs arising from the occurrence of any kind of problems that affect the performance of the company and are in clear violation of regulations and instructions or policies and procedures.

•The internal control job provides services to both the company's management and its board of directors. They are responsible for providing the Internal Controller with all the information that helps him to evaluate and adapt the internal control system and its effectiveness. It is the company's management responsibly to enable the Internal Controller to submit periodic reports to the Insurance Authority. The Inspection and control process is divided into several key elements according to their sequence and importance based on the following:
A. Obtaining a general knowledge about the institution and the auditor needs technical and legal indicators about the company he intends to audit.
B. Inspection and evaluation of the internal control system and internal tests of the internal control on operations (policy compliance tests) .The Internal Controller uses the practical and statistical methods of determining the sample size of the situation due to its huge quantity. In this context, the Internal Controller must act in accordance with the written procedures used in the institution in order to evaluate if the internal control system is comprehensive and reliable or not. The most important step taken by the auditor is to study the internal control system .In the light of this study, subsequent steps are determined and the size of the tests is determined.
C. Examine processes and procedures and submit reports on the extent of their compliance with the regulations, instructions and circulars issued by the Insurance Authority and work on sending a copy of the Internal Control reports through the company's management, provided that they are signed by the Authority's management and the internal auditor.
D. Ensuring that the internal control system of the company is effective at its minimum. In this context, it ensures that no mistakes or acts of fraud are committed, and then moves on to processes that are difficult for the internal control system to detect, review its analysis by comparing and studying their evolution from one cycle to the next.
E. Preparation of the audit report. In order for the Internal Controller to achieve success in his duties, he must be at the best level of professional and personal relations with all employees of the insurance brokerage company in which he works so as to create the best atmosphere for effective cooperation between him and the departments and sections of the company. Without such cooperation, the task of the Internal Controller would be difficult.

The following terms include some of the main and core functions of the Internal Controller in the insurance brokerage companies:

1. Review the relevant laws and has the full knowledge of all laws, regulations and instructions issued by the Insurance Authority and the work of the insurance broker (and the subsequent amendments, or regulations and instructions issued thereafter), attached herewith the list of the most important laws, regulations and instructions to be reviewed.
2. Continue to update the senior management of the board of directors, board of managers and key employees of all the applicable rules and policies of compliance to which the company must comply.
3. To inform all employees of the company through the senior management of all the policies and compliance regulations and its updates
4. Develop comprehensive internal control policies and procedures in insurance brokers that include an effective internal audit of the regulations, instructions and practices applied in the company’s activities, and should be approved by the board of directors of the bank.
5. Updating the policies and procedures periodically to ensure that the company complies with the latest regulations and instructions related to all the company's operations and activities.
6. Conduct annual and quarterly review of all the instructions included in the policies and procedures manuals applied in the company to ensure their conformity, consistency and compliance with their implementation in accordance with the requirements of the law and the Regulation and the amendments thereof and the regulations, instructions and circulars issued by the Insurance Authority.
7. Conduct an emergency and sudden review after coordination with the company's management to ensure the validity of the procedures and policies applied as mentioned in the previous paragraph.
8. Prepare a comprehensive plan for examination and ensure that all written policies and procedures approved by the Bank are compliant with applicable compliance rules.
9. Upload the annual and quarterly reports on internal controls on the website of the Insurance Authority. The Internal Controller may submit monthly reports if necessary, or if requested by the Authority's management.
10. Ensure that the management of the company and its employees apply the correction plan approved by the company's board of directors in accordance with the approved internal control reports.

The internal control of the technical departments’ performance in the insurance brokerage companies is one of the most important aspects that the Internal Controller must follow up and know all their aspects. These special tasks include reviewing the performance of all departments and the technical departments, especially those related to technical works in insurance brokerage. The following represent the key functions of the internal auditor.

Firstly: The Implementation of The Insurance Authority Board of Directors’ Resolution No.15 of 2013 concerning Insurance Brokerage Regulations, Decision No (58) of 2013 Concerning the Implementation of Insurance Authority Board of Directors’ Resolution No. 15 of 2013 and Insurance Authority Board of Directors Resolution No. 20 of 2014 On the Amendment of Some Provisions of the Insurance Authority Board of Directors Resolution No. 15 of 2013

The internal controller of the insurance brokerage company must complete a periodic review on the company's implementation of the Insurance Authority Board of Directors’ decision No. (15) of 2013 and its amendments in subsequent decisions or executive decisions issued by the Authority's management, specifically the obligations of the brokerage company stated in Section No. (4) of the said decision ,which stipulate the obligations of the brokerage company towards the Insurance Authority, Insurance companies and customers . The report must clarify the defect points and the corrective actions agreed upon with the management of the insurance brokerage company and what is the time frame of the proposed plan.

Secondly: The Implementation of the regulations of Anti- money laundering and combating terrorist financing in insurance activities:

• The Insurance Authority has issued the regulations of Anti- money laundering and combating terrorist financing in insurance activities by the Board of Directors resolution No. (13) of 2015. The regulations included clear definitions of insurance business, money laundering and terrorist financing, in addition to the definition of suspicious transactions and extraordinary transactions. The following is a summary of the main tasks assigned to the Internal Controller in this respect, pointing out the need to fully comply with all the provisions of the mentioned regulations.

• The Internal Controller should confirm the validity of the procedures used to open a customer account in the company, including full knowledge of customer information according to a clear form approved by the company management.

The most important information to be verified by the Internal Controller is:

1. If the client is a close partner of foreign persons who are politically exposed, this includes
a. The politically exposed foreigner.
B. The direct family members (spouses, children, their spouses and parents.)
C. The partners known to be close to the individual are:
• Individuals who have joint ownership of a legal entity, legal arrangement or any close working relationship with a politically exposed foreigner.
• Individuals who have sole ownership of a legal entity or legal arrangement established for the benefit of the politically exposed foreigner.

2. The Internal Controller shall ensure that the company obtains all necessary information and documents for the customers which include:

A. The Natural persons: full name, nationality, place and date of birth, current address, place of permanent residence, place of work, passport and / or identity card for individual clients, and keeping a certified copy. For incompetent persons, documents relating to them and their legal representative should be obtained, as appropriate.
B. The Corporate persons: full information and documents should be obtained and in particular (the Commercial Registration and the Articles of Association)mentioning the date of renewal and keeping a copy thereof. Also, the name and address of the owner and the names and addresses of the partners and their nationalities shall be obtained.
C. Public Shareholding Companies: The names and addresses of the Chairman and members of the Board of Directors and shareholders, each of which exceeds 5% or more, shall be obtained.
3. In the event that the transaction is for the benefit of another person or entity, the Internal Controller shall ensure that the company obtains a copy of identity of that person or that entity and keep a certified copy of the authorization letter, acquire and register adequate information about them.
4. When dealing with cooperatives, social or professional associations, a copy of the declaration decision of this association issued and signed by the Minister of Social Affairs must be obtained.
5. The Internal Controller shall confirm the prohibition of opening an account under a pseudonym. The name of the account holder must always be authenticated as in the identity, passport or commercial license, and the official responsible for opening the account must carry out a physical inspection of the passport, trade license or any identity card, The documents shall be marked as a true copy and signed.
6. The Internal Controller of the company shall be knowledgeable with the persons listed on the United Nations list of terrorism, compare the names of all the company's clients with that list, notify the unit of any transaction related to that list, and periodically update the list of persons through the United Nations website WWW.UN.ORG .

7. The Internal Controller shall work to determine the necessary bases for classifying the clients of the insurance company according to the degree of risk of their association with money laundering and terrorist financing. He shall adopt a system of classification of customers based on logical basis, with constant updating. Pursuant to the administrative decision No. (79) of 2015 concerning the guidelines of Anti-Money laundering and combating terrorist financing in the insurance activities .This system shall include at least the following risks:
a. The risks related to Services and Products.
B. The risks of Customers.
C. The risks related to specific geographical areas.

• With regard to terrorist financing operations, we refer to the Federal Law No. (7) of 2014 (issued on 20/08/2014, concerning combating terrorist crimes, particularly the definition of terrorist crime, terrorist purpose and terrorist result in Article (1) of this Law, and to article No (29) - (30) of the law relating to crimes of financing terrorism, where the Internal Controller must review the provisions of this law and work to apply them strictly.
• If there are serious reasons to suspect the existence of a money laundering or terrorist financing process, the Internal Controller(behind the scenes) checks the identity of the client or the concerned person without drawing the client or the person attention of these suspicions regardless of how much the subject amount of the process.
• In case of any of the above mentioned cases,
A. The Internal Controller(after taking the opinion of the company management)shall freeze the transaction.
B. The Internal Controller and the Company shall immediately notify the Financial Intelligence Unit for Anti- money laundering and suspicious cases unit (AMLSCU) of the Central Bank of the State through the electronic system or any appropriate method, and notify the Authority of what has been reported to the Unit.
C. The Internal Controller in his department shall keep a copy of the information sent to the Central Bank and the Insurance Authority.
D. The freezing of funds in suspicious cases is by order of the Central Bank.
E. The Public Prosecution may, after having been notified by the Central Bank of the reservation of the funds or the means used in the suspicious operations, and in the end the operation shall be subject to the decision of the competent court.
F. The Internal Controller does not assume that the possibility of money laundering or terrorist financing in this type or branch of insurance may be excluded. However, the most insurance branches of insurance that is liable to be used for the sepurposes:
A. Life Insurance and Family Takaful (Mixed Insurance).
B. Marine insurance of goods.
C. Insurance of jewelry stores and precious stones.

At the end of this part of the Guide, we emphasize the need for the Internal Controller to adhere to the following:
a. Full Implementation of the Board of Directors Resolution No. (13) of 2015 Concerning Anti-Money Laundering and Combating Terrorist Financing in Insurance Activities and Guidelines No. (79) of 2015, concerning Anti- Money Laundering and Combating Terrorist Financing in Insurance Activities
B. No to initiate procedures unless there are serious reasons for suspicion.
C. The proceedings take place in a strictly confidential manner.

Thirdly: Functions related to the disclosures and financial and non-financial statements of the insurance brokerage company.

The internal auditor, in cooperation with the company's management, shall notify and provide the Authority with the following:

A. A quarterly report signed by the Chairman of the Board of Directors or the General Manager or the Executive of insurance brokerage activities and related accounts, including a report on the financial solvency in accordance with the specified requirements within a period not exceeding 30 days from the end of the quarterly period.
B. An annual report signed by the Board of Directors or Board of Managers, containing all insurance brokerage activities conducted during the year and the final audited annual financial statements accompanied by the report of the external auditor, within a period not exceeding 60 working days from the end of the fiscal year.
C. An annual statement of the general framework of risk management which includes its internal procedures to assess its financial solvency and in proportion to the risks that may affect its financial position and strategy in allocating capital to encounter these risks.
D. A copy of any brokerage agreements concluded with the companies within seven working days of signing them on the electronic system of the Insurance Authority.
E. Notification on the appointment of accredited personnel and any amendment or change in their transfer or end of service and the reasons for such change with in two working days. He shall also notify the Authority of the appointment of an alternative until the vacancy is permanently filled within a period of 60 working days from the date of vacancy.
F. Notification on any change to any of the data or documents that have been registered based on it, within five days from the date of the change.
G. All data and statistics that are requested and in accordance with the periods specified by the Authority.
H. The insurance broker shall ensure that his annual and interim financial statements contain all necessary data and information relating to his financial solvency, regulations and objectives to manage the risks of his financial position, including a detailed breakdown of the durability and balances of payables as well as revenues from premiums and commissions from each company.