Supervisory Framework

The DFSA operates a risk-based supervision regulatory regime for all financial services, including insurance activities that are carried out in or from the DIFC.  Once authorised by the DFSA, a firm in the insurance sector will be supervised by a dedicated insurance supervision team.  Regulatory issues will be dealt with by experienced supervisors who have relevant insurance and reinsurance expertise.

As with all authorised firms, insurance firms are required to meet certain on-going regulatory requirements.  The DFSA uses the following regulatory tools to supervise insurance firms: 

For insurers which are part of a large international group, the DFSA participates in supervisory colleges with other regulators.  Appropriate memoranda of understanding facilitate the sharing of relevant information between regulators to achieve effective supervision of the group.

We also undertake thematic reviews, focusing on discrete regulatory issues which apply to a group of firms with similar business models (for example, maintenance of an Insurance Monies bank account and reconciliation process).  Thematic reviews usually involve an onsite visit to firms and/or analysis of documents and data received from firms. The completion of an insurance related thematic review usually results in publication of a report or a recommended policy proposal, which results in a change in our Rules reflecting the risk identified.

In addition to the usual set of reporting requirements that apply to Authorised Firms, insurers are required to prepare and submit actuarial reports on an annual basis. Any insurers which are branches, and certain captives, may approach the DFSA to request a waiver of this requirement.  Further, insurance intermediaries holding Insurance Monies are required to submit an Insurance Monies Auditor’s Report. The report must be prepared by an external auditor and that auditor must state the Firm’s level of compliance with the Insurance Monies Rules set out in the COB Module.  This requirement applies to all Firms with an endorsement to hold Insurance Monies.  In the event a Firm does not hold or control any Insurance Monies for the relevant reporting period, the auditor’s report should reflect this.

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