UAE, Sep 29 (Emirates 247): The Board of Directors of the Insurance Authority (IA) has adopted a new unified regulation for vehicle insurance policies against civil liability and against loss and damage.

Sultan bin Saeed Al Mansouri, Minister of Economy, and Chairman of the IA, hailed the new regulation as an important milestone in the development of organisational and technical rules for boosting performance of the UAE insurance market, vehicle insurance, and the protection of the policyholders’ rights.

The step is poised to enhance competitiveness of the UAE economy and to keep pace with the international best practices prevailing in the insurance industry, he added.

The adoption of this regulation comes as part of the IA's endeavours to maintain laws, regulations and rules governing the activities of the insurance sector in the UAE. The new regulation also comes in the light of the economic and social developments taking place in the UAE, national economic growth, and rapid economic and financial changes in the world.

"The new regulation supports the legislative base of the insurance sector of the UAE and entities operating therein it, according to legal, technical, and financial strong grounds. It increases the sector’s competitiveness at the regional and international levels in accordance with the best prevailing international practices," Al Mansouri said.

"The issuance of this unified regulation comes after more than 27 years of work using the two vehicle insurance policies issued in 1987, and after several amendments to them during that period," he pointed out.

"The regulation contains many provisions that will be considered by the company, raising a number of issues in the application.

"The regulation is a binding legal text that does not in any way prejudice the provisions of the insurance policies, with the possibility of executing an agreement inuring to the benefit of the insured," Al Mansouri explained.

"Vehicle insurance is differentiated according to the type of insurance, through separate policies, the first of which relates to the Civil Liability (Third Party), to the extent that it will be mandatory under the traffic law.

The second is one related to the (supplementary or comprehensive) loss and damage and is optional for those who want to cover their vehicle. This replaces what was called comprehensive insurance in a single insurance policy, including the two types of vehicle insurance," he asserted.

"The unified regulation of the vehicle insurance policy against civil liability and the policy against loss and damage contains numerous benefits for policyholders and the domestic market, and the same was not present in the previous two policies," he confirmed.

"The regulation protects the rights of policyholders and shareholders of insurance companies alike, and protects the companies themselves from risks they may be exposed to in the future.

"Thus, the regulation develops technical bases and rules necessary to promote the establishment of modern and sophisticated regulatory bases for the insurance market of UAE in accordance with best international practices. It further enables the insurance sector to increase its contribution to GDP and support the growth in the national economy in all fields, in accordance with sound and strong grounds," Al Mansouri said.