UAE Halts Foreign Insurer’s Vehicle Operations

The UAE Central Bank has once again taken strict measures against a foreign insurance company’s local branch, which did not meet the regulatory financial requirements. On July 29, 2025, the authority announced that it has suspended the vehicle insurance operations of the concerned insurer within the country.

Why was the suspension enforced?

According to the statement, the insurer violated the capital adequacy and guarantee requirements that are clearly outlined for insurance companies operating in the UAE by the relevant laws and regulations. The central bank emphasized that such oversights pose a direct risk to consumers, especially in a sector like vehicle insurance, where continuous coverage is crucial.

What happens to existing customers?

While the new insurance contract arrangements have been immediately prohibited, the contracts previously established remain valid. The central bank highlighted that the insurer remains responsible for fulfilling all the rights and obligations arising from insurance contracts entered into before the suspension. This means that customers can continue to claim compensation and other services based on the contracts in effect.

Not an isolated case

This measure is not the first instance where the UAE Central Bank has taken action against foreign entities. Several similar sanctions have been applied in recent months:

On July 16, another foreign bank branch was fined 600,000 dirhams for failing to comply with market conduct and consumer protection regulations.

On July 2, a separate financial institution’s branch was fined 5.9 million dirhams for breaching anti-money laundering regulations.

In none of these cases were the names of the affected banks or insurers disclosed, but the authority emphasized that the goal is to maintain the integrity of the financial system and protect consumers.

What is the central bank's goal with this stringency?

In recent years, the UAE’s financial regulatory authority has put increased emphasis on transparency, prudent operations, and strengthening the fight against money laundering. Such strict actions aim to deter financial service providers that ignore the rules, especially those with foreign backgrounds operating in the country.

What can consumers learn from this?

The case highlights that consumers must always act carefully when choosing an insurance company or bank. It's advisable to select institutions with a reliable track record, adequate capital, and that meet the national regulatory requirements. The central bank's action sends a clear message: there is no place for the disregard of financial regulations in the UAE.

(Source of the article is a statement from UAE Central Bank.)