UAE Law and Practice Contributed by: Raghad Hammad and Huda Al Zein, BLK Partners
3. Time limits (prescription) The right to subrogate is strictly time-bound. • The Three-Year Rule: Under Article 1036 of the UAE Civil Code, most insurance-related claims (including subrogation) must be filed within three years from the date of the incident or the date the insurer became aware of the right to claim. • Exception: For certain maritime or carriage of goods disputes, this period may be as short as one year. 4. The “no profit” principle Subrogation is an indemnity-based right. An insurer cannot use subrogation to make a profit. It is only entitled to recover the actual loss paid, plus court fees and legal interest (typically 5%–9% onshore). The market is currently characterised by a “Digital- First” approach, with several key trends and collabo- rations: • AI-Driven Claims and Underwriting: Start-ups and established insurers are collaborating to launch AI systems that can process claims in real time. This has reduced average settlement times by up to 50%. • Embedded Insurance: Non-insurance platforms (such as travel sites and automotive dealers) are increasingly embedding insurance products directly into the point of sale via APIs, allowing for “one-click” coverage. 10. Insurtech 10.1 Insurtech Developments • Product Innovation: Key developments include micro-insurance for low-income workers and usage-based insurance for motor fleets, where premiums are calculated based on live driving telematics. 10.2 Regulatory Response The UAE regulators – primarily the CBUAE and the DFSA (in the DIFC) – have shifted from passive obser- vation to active enablement.
• The 2025 Law: This landmark law formally brings technology providers and facilitators of financial services under the CBUAE’s direct supervision. It ensures that tech companies cannot avoid regula- tion simply by claiming they are not “insurers”. • Open Finance Framework (2024–2025): The CBUAE has mandated a phased rollout of Open Finance. Insurers are now required to share data (with customer consent) with authorised third-party providers via a centralised API Hub, fostering com- petition and personalised products. • Regulatory Sandboxes: The Sandbox Condi- tions Regulation allows insurtech start-ups to test innovative products in a live market environment with temporary exemptions from standard licensing requirements, provided they have strict consumer safeguards in place. • Stricter Digital Enforcement: With the expansion of digital sales, the regulator has increased the maximum fine for non-compliance (including data breaches and unlicensed digital marketing) to AED1 billion. 11. Emerging Risks and New Products 11.1 Emerging Risks Affecting the Insurance Market Cyber Risks and Data Privacy As insurers and brokers digitalise, they have become high-value targets for ransomware and data breaches. • The Risk: Sophisticated social engineering and cross-border data leaks. • Regulator’s Response: The Insurance Brokers’ Regulation (February 2025) and the 2025 Law man- date that all personal data must be stored onshore in the UAE. Companies must now have “Cyber Resilience” frameworks, including ten-year audit- able data backups and dedicated cyber-incident response plans. Artificial Intelligence (AI) and Automation Generative AI is being used for instant underwriting and “vision-based” claims (using photos to assess car damage).
504 CHAMBERS.COM
Powered by FlippingBook