FEDERAL LAW No.6 Issued on 5/2/2007 AD

Corresponding to 21 Muharram 1428 AH

ON THE ESTABLISHMENT OF THE INSURANCE AUTHORITY AND REGULATION OF INSURANCE OPERATIONS

Abrogating Federal Law no. 9/1984 dated 20/03/1984 Amended by Federal law no. 5 of 2012 dated 10/10/2012

We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates State, Pursuant to the perusal of the Constitution; and Federal Law no. 1 of 1972, on the Jurisdiction of the Ministries and the Powers of the Ministers,

and its amending laws; and Federal Law no. 6 of 1974, on Public Utility Associations, and its amending laws; and Federal Law no. 5 of 1975, on the Commercial Register; and Federal Law no. 26 of 1981, on the Maritime Commercial Law and its amending laws; and Federal Law no. 8 of 1984, on Commercial Companies, and its amending laws; and Federal Law no. 9 of 1984, on Insurance Companies and Agents, and its amending laws; and The Civil Transactions Law promulgated by Federal Law no. 5 of 1985, and its amending laws;

and The Penal Code promulgated by Federal Law no. 3 of 1987, and its amending laws; and The Civil Procedures Law promulgated by Federal Law no. 11 of 1992, and its amending laws; and The Criminal Procedures Law promulgated by Federal Law no.35 of 1992, and its amending laws;

and Federal Law no. 21 of 1995, on Traffic and Circulation; and Acting upon the proposal of the Minister of Economy, the approval of the Cabinet and the

ratification of the Federal Supreme Council; Have promulgated the following Law:

INTRODUCTORY TITLE DEFINITIONS

Article 1 Unless the context otherwise requires, the following words and expressions shall have the

meanings shown opposite to each:

The State: The United Arab Emirates State.

The Ministry: The ministry of Economy.

The Minister: The minister of Economy.

The Authority: The Insurance Authority established under the provisions of this Law.

The Board: The Authority’s Board of Directors.

The Chairman: The Chairman of the Board.

The Director General: The Director General of the Authority.

The Company: The Insurance Company established in the State as well as the foreign insurance company licensed to operate in the State whether through a branch or an insurance Agent.

The Insurer: Any Insurance Company established in the State or any foreign company licensed to practice insurance activities in the State, under the present Law.

The Insured: The person who contracted insurance with the Company.

Insurance Agent: The person accredited and delegated by the Company to practice insurance activities on its behalf or on behalf of one of its branches.

Insurance Policy: The Insurance instrument (Policy) concluded between the Insurer and the Insured comprising the contract conditions between the parties, their obligations and rights, the rights of the insurance beneficiary, and any riders appended to this Policy.

The Reinsurer: Any Reinsurance company established in the State or any foreign reinsurance company licensed to perform reinsurance activities in the State; or a reinsurance company in the State or a reinsurance company abroad.

Insurance Broker: The person who independently acts as an intermediary in insurance or reinsurance activities between the applicant for insurance or reinsurance, on one hand, and any insurance or reinsurance company, on the other hand, and receives in consideration of his fees a commission from the insurance or reinsurance company that issues the insurance or reinsurance policy.

The Peril Survey and Appraisal Assessor: The person who inspects and assesses the damages in matters of insurance.

The Insurance Advisor: The person who undertakes the study of insurance needs of his clients, gives his advice as to the adequate insurance coverage and assists in preparing the insurance requirements; against remuneration to be paid by his clients.

The Actuary: The person who evaluates the amount of insurance policies as well as the related documents and accounts.

The Register: The Register of insurers or insurance agents.

The Branch: The branch that undertakes insurance activities in the name of the principal company.

The Accredited Manager: The person appointed by a foreign insurance company to manage its branch in the State.

The Beneficiary: The person who acquired the rights to the insurance contract, whether initially or through transfer of these rights in a legal manner.

The Technical reserves: The reserves which the insurer must deduct and keep in order to cover his financial obligations towards the insured in compliance with this Law.

The Solvency Margin: The excess amount of the Company’s assets over its liabilities which enables it to pay fully its liabilities and the indemnities due upon their maturity, without adversely affecting the Company’s activities or weakening its financial position.

The Minimum Insured Amount: An amount equal to one - third of the required Solvency Margin or the amount fixed by the Board, whichever is bigger.

The Auditor: The Auditor licensed to work in the State.

Article 2 1- The provisions of this Law shall apply to all insurance companies established in the State and to

the foreign companies licensed to operate in it, including the companies performing co-insurance, joint insurance or reinsurance activities, provided for in this Law, and related professions.

2- The provisions of this Law do not apply to companies operating in the State free zones, except those mentioned in a specific text of this Law.

Article 3 1- Insurance is a contract whereby the insurer undertakes to pay to the insured or to the beneficiary,

to whose favor the contract was made, an amount of money, an annuity or other indemnity in case an accident occurs or the insured risk materialize, in consideration of premiums or any monetary payments payable by the insured to the insurer.

2- The insurer is under obligation to pay the indemnity provided for in the policy to the insured or the beneficiary – as the case may be – upon occurrence of the accident or materialization of the risk insured, thus legally subrogating the insured or the beneficiary in their rights or their obligations.

3- Upon application from the concerned persons, the Company is under obligation to issue an insurance policy as concerns all vehicles licensed to circulate in the State. The implementing Regulation to this Law shall fix the cost tariff of such insurance taking into consideration the seriousness of the risks.

TITLE ONE INSURANCE ACTIVITIES AND KINDS

Article 4 For the purpose of applying the provisions of this Law, direct insurance activities are classified in

three categories:

1- Insurance of persons and endowment insurance.

2- Insurance of property.

3- Insurance of liabilities.

The implementing Regulation to this Law shall determine the contents of each of these three categories.

Article 5 Insurance activities comprise the activity relating to the kinds stipulated in Article 4 of this Law. It

also includes reinsurance, insurance agents, actuarial activities, insurance brokers, risk detection and appraisal assessors and Insurance Advisors.

TITLE TWO THE INSURANCE AUTHORITY

Article 6 1- Shall be constituted an Authority under the name of (Insurance Authority) enjoying juristic

personality as well as financial and administrative autonomy and shall have an independent budget annexed to the State Budget. In this quality, it shall have the capacity to perform all works and acts ensuring the realization of the objects and tasks assigned to it under this Law and shall be answerable to the Minister.

2- The principal seat of the Authority shall be in the city of Abu Dhabi and it may, by resolution of the Board, establish branches within the State, as the public interest may require.

Article 7 The Authority aims at regulating and supervising the insurance sector in a manner assuring the

availability of the proper atmosphere for its development and consolidation of the role of the insurance industry ion insuring persons, properties and liabilities against risks in order to protect the State national economy, accumulate and invest the national savings in order to consolidate the development of the economy in the State, encourage fair and effective competition, afford the best insurance services at competitive prices and coverages and domiciliate employment in the insurance market. It shall for this purpose assume the following functions:

1- Protect the rights of the insured and beneficiaries and control the financial solvency of the Companies so as to ensure a sufficient insurance coverage for the protection of these rights.

2- Act towards the improvement of the performance and capacity of insurance Companies and compel them to comply with the rules and ethics of the profession in order to increase its ability to provide better services to the insurance beneficiaries and achieve positive competition between them.

3- Take action towards provision of qualified human capabilities to perform insurance activities including the establishment of an institute for this purpose in conjunction and cooperation with the Emirate Insurance Association, in accordance with the laws in force.

4- Propose programs and plans for the development of the insurance sector in all fields; develop insurance awareness and prepare studies and researches relative to insurance activities and circulate same.

5- Strengthen cooperation and complementarily with the Authority’s regulating the insurance sector on the Arab and universal levels.

6- Receive applications for the establishment and opening of branches and offices for the representation of insurance and reinsurance companies, insurance agents and connected professions as well as issuing the required licenses.

7- Specify the risks for which insurance is compulsory.

8- Fix uniform tariffs for certain kinds of insurance and whatever belongs thereto, in cases where public interest so requires.

9- Any other tasks decided by the Board concerning the Authority of the insurance sector.

Article 8 The Authority shall be composed of the following:

1- The Board.

2- The Director General.

3- The Executive Body.

THE AUTHORITY’S BOARD OF DIRECTORS

Article 9 The provisions of Article 9 were replaced by virtue of Article one of Federal Law no. 5 of

2012 dated 10/10/2012 and became as follows: The Authority shall have a board of directors formed of the chairman and a number of members

who shall be appointed by virtue of a resolution issued by the Cabinet. The candidates for membership of the Board of Directors shall have no kind of conflict of interests in the membership thereof throughout the mandate thereof. The resolution on the formation of the Board shall specify the number of members, remunerations and mandate thereof.

The Board, in the first session thereof, shall elect a vice-chairman to replace the chairman in case of absence or disability of the latter.

Article 10 The Implementation Regulation to this Law shall specify the membership conditions to the Board

of Directors.

Article 11 1- The membership of any of the members of the Board shall terminate in any of the following

circumstances:

a- Resignation or replacement of the member by the Body which selected him.

b- Absence from attending three consecutive meetings, or any four meetings during any year, without reason accepted by the Board.

c- Disqualification for any reason provided for in the Implementation Regulation to this Law.

2- Upon recommendation of the concerned Body and within a maximum period of sixty days from the date of membership vacancy, the Cabinet shall appoint a substitute member to the Board in order to complete the period of the member whose membership came to an end.

Article 12 The Board shall exercise the functions and powers provided for in this Law, its implementation

Regulation, the Statutes, instructions and decisions issued in pursuance thereof, including:

1- Draw the general policy of the Authority and approve the plans and programs required for its implementation.

2- Approve the draft laws relating to insurance activities and submit same to the Cabinet.

3- Issue the instructions necessary for the implementation of the provisions of this Law, regulations and Statutes issued thereunder.

4- Approve the annual balance-sheet of the Authority and submit same to the Cabinet for ratification.

5- Approve the annual report and the closing accounts of the Authority and submit same to the Cabinet.

6- Appoint an auditor and fix his remuneration.

7- Accept contributions, grants, gifts and donations that are compatible with the objectives of the Authority.

8- Decide upon the objections submitted by the Company concerning the amendments to the specimen insurance instruments and follow up these decisions.

9- Any other tasks related to the affairs and objectives of the Authority.

Article 13 The Board shall meet, at least, once every quarter and may be convened to an extraordinary

meeting upon request of the Chairman or of at least three Board members.

A quorum of the majority of the members, including the Chairman or his Deputy, is necessary for the validity of the Board meetings. Resolutions shall be taken by absolute majority vote of the attending members and, in case of a tie, the side of the presiding member shall prevail. Minutes of the meetings shall be recorded and approved by the presiding member and resolutions shall bear the signature of the Chairman.

The Board may invite whoever it sees fit, from among qualified and experienced experts and counsels, to attend its meetings but they shall not have the right to vote when taking resolutions.

Article 14 Upon recommendation of the Chairman, a Director General of the Authority shall be appointed by

Federal Decree and shall have the rank of a Deputy Minister.

Article 15 The Director General shall be in charge of expediting the Authority’s affairs and shall represent it

in its relationship with third persons and before the judiciary and he shall have in particular the following:

1- Implement the policy, plans and programs approved by the Board.

2- Propose the organizational structure of the Authority and supervise it so as to ensure the smooth run of the Authority’s affairs.

3- Draw-up programs and plans for the development of the insurance sector and upgrading the level of its services, in order to submit same to the Board.

4- Prepare and submit to the Board, draft laws, regulations, bylaws, instructions and resolutions, to be issued under the present Law and relating to insurance.

5- Prepare the Authority’s draft annual balance-sheet and submit it to the Board.

6- Examine the filed complaints relating to insurance services and take the adequate decisions in their respect, unless he deems necessary to submit these to the Board.

7- Issue the necessary decisions falling within his jurisdiction under the present Law.

8- Any other functions entrusted to him by the Board.

Article 16

The Director General may delegate some of his functions to the employees of the highest Administration in the Authority, provided for in this Law, provided that the delegation is in writing and specific.

Article 17 The Executive Body is composed of employees appointed or contracted in accordance with the

bylaws issued under this Law.

Article 18 The Authority shall charge annual fees in return for supervision and control, as well as any other

fees proposed by the Board provided they are sanctioned by a Cabinet decision.

Article 19 The provisions of Article 19 were replaced by virtue of Article one of Federal Law no. 5 of

2012 dated 10/10/2012 and became as follows: The revenues of the Authority shall be composed of the following resources: 1. Any amounts allocated for the Authority by the Government. 2. Fees collected by the Authority. 3. Grants, subsidies, donations and subventions accepted by the Board of Directors in accordance

with the objectives of the Authority.

4. Any other resources approved by the Board.

Article 20 The financial year of the Authority begins on the first day of January and ends on the thirty first

day of December of each year. The first financial year, however, shall start as of the effective date of this Law and ends on the last day of December of the following year.

Article 21 1- The Authority’s funds shall be considered as public funds.

2- The Authority shall benefit of the exemptions and facilities granted to ministries and government departments.

3- The accounts of the Authority shall be audited by one of the auditors registered in the list of auditors exercising their profession.

Article 22 The Authority shall keep reserves equal to double the total expenditures in its yearly budget and the

amounts in excess shall be transferred to the State Treasury.

Article 23 Upon recommendation of the Director General, the Board shall issue the instructions relating to

insurance activities, including:

1- The solvency margin and the minimum amount of insurance provided it does not fall below one third of the solvency margin, with due regard to the international standards in this respect.

2- Bases on which are computed the technical reserves.

3- Reinsurance ratios.

4- Bases of investment of the rights of policyholders.

5- Determination of the Company’s assets against its insurance obligations.

6- The accounting policies to be followed by the Company and the forms required to prepare and submit the reports and financial statements.

7- Bases of keeping accounting books as well as the Companies’ records and those of its agents and brokers and specifying the information that should be entered in these books and registers.

8- Registers which should be kept and held by the Company as well as the information and documents that should be provided to the Authority.

9- Rules and ethics of the profession.

10- Combating money laundering and financing terrorism in insurance activities, in collaboration with the concerned authorities.

TITLE THREE INSURANCE COMPANIES

CHAPTER ONE THE INSURER

Article 24 Insurance and reinsurance activities shall be exercised in the State by any of the following persons

who are licensed and registered with the Authority:

a- A public Joint Stock company established in the State.

b- A branch of a foreign insurance company.

c- An insurance Agent.

2- a- A prior approval of the Board is required before establishing in the State any insurance company or opening a branch of a foreign insurance company or performing the work of an insurance Agent.

b- The Company’s financial year starts on the first of January and ends on the thirty first of December of each year. As concerns its first financial year, it shall start as of the date of its foundation and end on the thirty first of December of the following year.

3- The insurance company’s capital must not be below the minimum fixed by the Implementation Regulation to this Law.

4- Shall be void, any insurance policy concluded by a Company that is not recorded in accordance with the provisions of this Law. The injured party may claim damages for the prejudice resulting from such voidance.

Article 25 1- The Company may not combine between insurance on persons, capitalization insurance and

property and liability insurance activities.

2- The existing companies that practice the two kinds of insurance provided for in clause (1) of this Article shall have to adjust their situation within five years as of the effective date of this Law. This period may be extended by a Cabinet decision.

3- The existing companies that practice the two kinds of insurance stated in clause (1) of this Article shall, upon the effective date of this law, undertake to abide by the instructions issued by the Board relating to the Authority of each of the two kinds of insurance.

Article 26 1- It is not allowed to contract insurance with an insurance company outside the State with regard

to funds or properties situated in the State or to liabilities arising therein. It is not also permitted to broker in transactions on such funds, properties or liabilities except with companies registered in accordance with the provisions of this Law.

2- The insurer may reinsure in or out of the State.

Article 27

The Company may open branches in the State, after complying with the provisions of this Law.

Article 28 The insurance policy in the state shall be written in the Arabic language to which may be attached a

comprehensive translation in another language. In case of discrepancy in the interpretation of the policy, the Arabic text shall prevail.

Clauses in the policy exempting the Company from liability must be written in bold characters, in a different print color and initialed by the insured.

Article 29 The Company undertakes to employ the number of nationals as decided by the Cabinet.

Article 30 May neither be a member of the Board of Directors of a Company nor a general Manager or

mandated Director, any person who:

1- Has been condemned for a felony or a misdemeanor against honor, trust, public morals, or for bankruptcy without being rehabilitated.

2- Has been considered by the Board liable of a serious violation to the provisions of this Law, or the Companies Law, in his capacity of General Manager or member of the Board of Directors of a company, including his responsibility for causing the forced liquidation of the company.

Article 31 1- The Chairman or members of the Board of Directors of the company, its General Manager, its

delegated Director or the person acting for him, any of the company’s managers or any of its high ranking officers are prohibited to:

a- Participate in the management of any other competing with or similar to the insurance company.

b- Compete with the business of the Company, do any act or perform any activity that may contradict the Company’s interests.

c- Practice the work of an insurance agent or broker.

d- Receive any commission for any of the insurance acts.

2- It is prohibited for any person assuming the management of the Company, or for any of its employees, to act as representatives of any shareholder in this company.

Article 32 Each of the General Manager, the delegated Director and the senior officers of the Company must

fulfill the conditions of capacity and experience in the insurance business. The Company shall provide the Authority with a detailed statement that includes the qualifications and experience of each of them as specified in the Implementation Regulation to this Law.

Article 33 1- The Company has to inform the Authority of the names of the members of its Board of

Directors, its General Manager or Delegated Director or any of its senior officers, as well as of the vacancy of any of their positions which the company must fill within sixty days from the date of their occurrence and inform the Director General of the Authority of this fact.

2- The Company’s Board of Directors shall provide the Authority with copies of the Minutes of the Board meetings and resolutions relating to the election of the Chairman of its Board of Directors, his Deputy and the members accredited to sign for the Company, together with samples of their signatures, within seven days from the issue of such resolutions.

3- In case the Chairman or the members of the Board of Directors of the Company submit their resignation or if the Board loses its legal quorum, the Authority’s Board of Directors shall form a

provisional committee composed of experienced and specialized persons, and shall appoint a president and a vice-president for such committee, from among its members. This Committee shall manage the Company, convene the General Meeting of Shareholders to meet within a period not exceeding three months as of the date of formation of such Committee, renewable once for the same period, in order to elect a new Board of Directors for the Company. The Company shall bear the fees of such Committee as fixed by the Board.

Article 34 In implementation of the instructions issued by the Board, the Company shall keep the following:

1- The solvency margin and the minimum amount of insurance as concerns the kind of insurance involved.

2- Technical reserves estimated at the end of each financial year.

3- Reserves that must be kept in the State.

Article 35 The Company licensed to practice persons and capitalization insurance activities shall engage a

licensed actuary within one month as of the date on which it was licensed and inform the Director General of this within one month from such appointment or accreditation. Companies that were licensed prior to the effective date of this Law have to adapt their situation in conformity with the provisions of this Article within one month as of the effective date of this Law.

Article 36 1- Companies have to submit any data or information required by the Director General concerning

themselves or other companies, having ownership relations or otherwise connected therewith. These data and information must be submitted within the period fixed by the Director General, together with any data or information submitted by the Company to any other controlling Body or any data or information the company receives from such bodies, upon their occurrence.

2- The Company’s Board of Directors shall convene the Director General to attend the General Meeting of Shareholders fifteen days at least prior to the date of the meeting. The Director General may delegate, a representative from among the employees of the Authority for this purpose.

3- The Director General may assign one or more employee(s) of the Authority to verify or scrutinize, in suitable time any of the Company’s transactions, registers or documents, and the Company must put any of these at the disposal of the delegated employee and cooperate with him, thus enabling him to perform his duties in full.

4- As a result of the scrutiny made under the provisions of clause (3) of this Article, the Director General shall appoint experts, counsels, actuaries or auditors to verify the Company’s business transactions, assess its status and submit a report thereon. The Company has to offer any assistance required for the performance of their work in the most complete manner and shall bear the salaries, fixed for any of them, by the Director General.

5- The expert, counsel, actuary or auditor is prohibited from disclosing, to anybody whatsoever, any of the information that reached him under the provisions of clause (4) of this Article, unless he obtains a written approval of the Board to do so.

Article 37 1- The Company is under obligation to provide the Authority, within a period not exceeding four

months as of the expiry of the financial year, with a detailed report on its activities, duly signed by the Chairman of the Board, the delegated Director or the persons authorized to sign on behalf of the Company, which shall include its annual closing accounts and all details appended thereto including its yearly Balance-sheet, detailed profit and loss accounts’ the kind of insurance practiced and for each branch thereof, and the auditor’s report and such within a period not exceeding four months as of the end of the financial year. The report should reach the Authority thirty days at least prior to convening the Company’s General Meeting of Shareholders.

2- Should it appear that the accounts and information provided for in clause (1) of this Article are inconsistent with the provisions of this Law, or the regulations, bylaws, instructions or decisions issued thereunder, the Director General shall ask the Company’s Board of Directors to correct them in order to obtain the approval thereon which is a condition precedent to their submission to the General meeting of the Board of Directors.

3- In case the Company is exposed to a bad financial or administrative situation or has sustained heavy losses affecting the rights of the insured or beneficiaries, the Chairman of its Board of Directors or its General Manger shall forthwith inform the Director General of this matter.

Article 38 1- a- The Company shall provide the Authority with forms of policies and riders used in its

business transactions which include the general and special conditions, the technical bases applied in these documents and the premium rates appended thereto. The Company shall also provide the Director General with the surrender value tables of these policies, concerning insurance on persons and capitalization, and the premium rates appended thereto.

b- Should public interest so require or in case of an existing material defect, the director General shall demand an modification of these forms within the period fixed by him for this purpose. The Company may object to the amendment and in case of disagreement, the matter shall be submitted to the Board for settlement.

2- The company shall provide the insured and the beneficiaries with copies of the policies and the relevant information.

Article 39 Insurance and reinsurance Companies registered with the Authority shall abide by the principle of

disclosure and transparency in their dealings with their clients and in all documents, papers, publications, advertisements, publicity, articles and scientific material issued by them. The Board shall issue a regulation concerning the matters that should be observed for executing the contents of this Article.

Article 40 1- The Company’s auditor shall submit to the Authority, with a copy to the Chairman of the

Company’s Board of Directors, a prompt report in the following instances:

a- If he notices that the financial situation of the Company does not allow it to honor its obligations towards the insured or adversely affects its capacity to meet the financial requirements provided for in this Law, and the regulations, byelaws, instructions, and decisions issued thereunder and which pertain to the financial status of the Company.

b- If he discovers a material defect in the Company’s financial practices, including the entry of data in its accounting registers.

c- If he rejects or makes reservations as concerns any certificate issued by the Company relating to its income or its financial data.

d- If he decides to resign or if his reappointment in the Company has been rejected by the Extraordinary Meeting of shareholders.

2- The Director General may ask the Company’s auditor to provide him directly, within a specified period, with the necessary information for the control of the Company’s activities.

3- In case the auditor recommends the non ratification of the financial statements submitted to him by the Board of Directors, the General Meeting of shareholders may take any of the following resolutions:

a- Return the financial statements to the Board of Directors and ask it to correct the balance-sheet and the profit and loss account according to the auditor’s remarks and consider them ratified subsequent to this correction.

b- Refer the matter to the Director General who shall appoint an expert Committee of auditors and fix their remuneration, which shall be borne by the Company, so as to settle the dispute between the Board of Directors of the company and its auditors. The decision of the Committee shall be binding after resubmitting it to the General Meeting of shareholders for approval. The balance-sheet and the profit and loss account shall be amended in accordance with the decision of the Committee.

Article 41 1- The Authority shall effect periodic inspections on insurance and reinsurance companies to

ascertain the soundness of their financial situation and their compliance with the law provisions and the technical bases on which insurance and reinsurance operations are built. Should it come to the knowledge of the Director General, through inspection, or through sufficient information leading to any of the following, he has to make sure that the said information is correct:

a- The Company did not honor its obligations or that it may fail to do so, or may be unable to continue its activities.

b- The Company violated the provisions of this Law, or the Regulations, byelaws, instructions or decisions issued thereunder.

c- The measures taken by the Company that are necessary to the reinsurance of the risks assumed by it are insufficient or totally missing.

d- The Company is no more fulfilling one of the licensing or registration conditions that are necessary for practicing the insurance business.

e- The Company’s total losses have exceeded 50% of its paid-up capital.

f- The Company has ceased its activities for more than one year without justifiable or licit cause.

2- Should it appear to the Director General that the above information is true, he shall have to ask the Company to take specific measures to redress its situation within the period he fixes for this purpose, failing which the Director General shall refer the matter to the Board in order to take the necessary measures for redressing its situation including:

a- Prevent the Company from issuing additional policies or from practicing one or more specific kind of insurance.

b- Set up a maximum level for the total amount of premiums that may be collected by the Company from insurance policies issued by it.

c- Maintain in the State assets equal in value to all its net obligations resulting from its activities in the State or a specific percentage of its value determined by the Board upon recommendation of he Director General.

d- Limit the practicing by the Company of any of its investment activities concerning the guarantee of the solvency margin or compel the Company to liquidate its investments in any of these activities in order to reach this objective unless this shall cause prejudice to the Company as determined by the competent expert in this field.

e- Ask the Company or the principal seat of the foreign insurance company, as the case may be, to take the necessary measure to redress its administrative situation including the discharge of its general manager, its delegated Director or any of its principal officers.

f- dismiss the Company’s Chairman of the Board or any Board member whose responsibility, for letting the Company reach such a deteriorated stage, is established.

g- Wind up the Company’s Board of Directors and appoint a neutral and temporary administrative committee, formed of experts, as a substitute for the Board, designate a president and vice-president for this committee, and determine its functions and competences for a period not exceeding six months renewable for a maximum period of one year where circumstances so require. The Company shall bear the remuneration of the said committee as fixed by the Authority. Upon termination of the Committee’s functions, a new Board of Directors shall be elected in accordance with the provisions of the Law on Commercial Companies.

h- Take the necessary measures to merge the Company in another company in accordance with the provisions of the Law on Commercial Companies.

i- Suspension or cancellation of the Company’s license.

j- Restructuring the Company.

k- Liquidation of the Company.

FUNDS OF INSURANCE COMPANIES

Article 42 Every insurance company must keep with a bank operating in the State a deposit, as guarantee for

the discharge of its obligations, which amount shall be as follows:

1- Four Million Dirhams for the two kinds of insurance on persons and on capitalization, provided for in clause (1) of Article 4 of this Law.

2- Two Million Dirhams per each kind of insurance which shall come under property and liability insurances provided for in clauses (2) and (3) of Article 4 of this Law, provided the total amount does not exceed Six Million Dirhams as a maximum regardless of the number of branches.

The amount of the deposit stated in the two preceding clauses may, upon proposal from the Chairman, by a Cabinet order, be increased.

The deposit shall be in cash or its equivalent in shares and bonds of companies established in the State or a mortgage on a real estate located in it, on condition the approval of the Chairman is obtained.

The deposit shall be kept in one of the accredited banks in the State in the name of the Company and to the order of the Chairman in his quality. As to the real mortgage, an inscription to this end should be recorded with the competent mortgage registration department. The Authority shall be provided with an official certificate to this effect. The returns of the cash deposit, if any, shall be entered in the Company’s account. Upon approval of the Chairman, all or part of the deposit may be substituted for any other form of deposits set forth in this Article provided that its amount is not, at the time of such substitution, below the level fixed by law for the deposit.

Article 43 The deposit may not be disposed of but with the written permission of the Chairman or his deputy.

The competent court or the Committee may order the distraint of the deposit for debts resulting from insurance operations performed by the Company but not for other debts.

The Authority must ask the Company to complete the deposit, if it falls below the limit set forth by law, due to the fall of the value of shares, bonds, real estates, or the levy of distraint on all or part of it according to the preceding clause or for any other reason. The Company has to complete the deposit within a maximum period of thirty days as of the date of the request to complete the deposit.

Article 44 The bank is not allowed to dispose of the deposit in any manner whatsoever except by virtue of a

court judgment or a written authorization from the Chairman. The authorities concerned with the registration of real estates may not as well cancel the inscription of mortgage on the real estate object of the deposit except by a written authorization from the Chairman or whoever is authorized by him.

Article 45 Companies practicing any kind of insurance provided for in clause (1) of Article 4 must keep with

it, inside the State, funds equal in value, to at least, the amount of the mathematic reserves specific to the contracts concluded or implemented within the State. The Cabinet may, upon recommendation of the Chairman, reduce the proportion of the said reserves that should be kept by the Company to a percentage not below 50%.

These funds must be completely separate from the funds pertaining to the other insurance operations and, when computing the said reserves, the deposit mentioned in clause (1) of Article 42 of this Law should be taken into consideration so as to adopt whichever is the larger amount.

Article 46 The insurance companies operating at the effective date of this Law shall be given a respite of one

year from that date to adjust their situation with the provisions of clauses (1) and (2) of Article 42. This respite may be extended by another year by a Cabinet decision upon recommendation of the Chairman.

THE LICENSE

Article 47 1- It is not allowed to establish any Company or open a branch of a foreign insurance company in

the State except after obtaining a license from the Authority which may give or reject the license as it deems appropriate to the requirements of the national economy, and on condition that the object of the company be the practice of the insurance business. The Implementation Regulation to this Law shall specify the documents that should be submitted with the application for the license.

2- In case the license is given upon false statements, it shall be cancelled by decision of the Director General.

CHAPTER TWO REGISTRATION OF INSURANCE COMPANIES AND AGENTS

Article 48 1- Any of the companies stated in clause (1) of Article 24 of this Law may not practice insurance

operations except after its recording in the register in accordance with the provisions of this Law and fulfilling the conditions specified in the Implementation Regulation to the said Law.

2- Should registration be effected on basis of false information, it shall be cancelled by decision of the Director General.

Article 49 The Company may not place reinsurance with another company unless the latter is licensed to

practice the same kind of insurance for which reinsurance is requested.

Article 50 Acting upon the submission made by the Director General, the Board may order the Company to

stop practicing one kind or more of insurance for a period not exceeding one year and notify the Company and the concerned authority of the said order, in any of the following instances:

1- If the Company violates the provisions of this Law, or the Regulations, byelaws or instructions issued thereunder.

2- If the Company ceases to fulfill any of the conditions that should be observed for registration according to the provisions of this Law.

3- If the Company does not practice any of the kinds of insurance included in the registration or ceases to practice it for a period of one year.

4- If the Company fails to honor its financial obligations.

5- If the Company abstains from executing a decisive court judgment concerning the insurance contract.

Article 51 1- Should the Company, within a period not exceeding one year from the date of discontinuance,

remove the cause of ceasing the work due to any of the instances stated in Article 50 of this Law, the

Board, acting upon the proposal of he Director General, shall issue a decision approving that the Company resume or start practicing the insurance operations and notify the concerned authority and the Company of the decision.

2- Should the Company refrain from removing the cause of discontinuance of work within a period not exceeding one year from the date of discontinuance, its licence shall be cancelled as regards the kind or kinds of insurance involved by resolution of the Board and the concerned authority and the Company shall be notified of the decision.

Article 52 1- Decisions issued by the Board, for this purpose, shall specify the measures concerning the

discontinuance of work or cancellation of the license for one or more kinds of insurance, as well as the powers given to the Director General in this respect.

2- The decision ordering the cessation of work or the cancellation of the license for one or more kinds of insurance shall entail the following:

a- Prohibit the Company to conclude insurance contacts in any of these kinds of insurance at the risk of applying the penalties provided for in this Law.

b- Considering all rights and obligations resulting from contracts concluded prior to the cessation of work or cancellation of the license, for one or more kinds of insurance involved, valid and in effect and the Company shall remain liable therefore.

Article 53 The Company whose registration has been cancelled as regards one or more kinds of insurance

may apply for re-registration within a period not exceeding one year as of the date of cancellation and shall attach to its application the documents establishing the removal of the reasons which prompted the cancellation of the registration. The Board shall give its decision, in this respect, upon what was submitted by the Director General, within a maximum period of one month from the date of submitting the matter to the Board.

Article 54 1- If the Company, that had its registration cancelled for all kinds of insurance to which it was

licensed to practice, does not submit an application for reinstating its registration within the period stated in Article 53 of this Law, or if the Board rejects this application, the Company has to start the procedures for its voluntary liquidation within one month from the expiry of this period or the notification of the rejection decision, failing which it shall be liquidated according to the provisions of this Law.

2- The registration of the Company shall be considered as cancelled in case a decision is taken for its voluntary liquidation or a final court judgment is rendered ordering its compulsory liquidation or if it is declared bankrupt.

CHAPTER THREE BRANCHES OF FOREIGN INSURANCE COMPANIES

Article 55 1- Prior to registration, foreign insurance companies are bound to appoint an authorized manager

for their branch in order to practice in their stead insurance activities and they shall be responsible for his acts. These companies have to attach to their appointment decision an official document, of which a certified copy shall be deposited with the Authority, empowering the manager with all necessary powers to manage the branch, including the following powers:

a- Issue insurance policies and riders as well as paying the indemnities resulting therefrom.

b- Represent the Company before the Authority, the competent courts and all other official and non official bodies as concerns the work and administration of the branch.

c- Receive warnings and all other notifications and correspondence addressed to the Company.

2- Branches of foreign insurance companies must inform the Director General of the authorized manager’s name within one month from the date of his appointment and, in case of vacancy of his position, they have to appoint a substitute within one month from such vacancy.

3- The branch of the foreign insurance company has to publish the consolidated closing accounts of the company in two local wide-spread dailies issued in the State in the Arabic language and in a daily local paper issued in the English language.

REPRESENTATION OFFICES OF FOREIGN INSURANCE COMPANIES

Article 56 1- Representative offices of foreign insurance companies may not start their activities in the State

before obtaining a license to this effect from the Authority.

2- The Authority shall issue a Regulation regulating the functions of these offices.

3- Acceptance or rejection of granting a license shall be done by a Board decision to be notified to the concerned party.

CHAPTER FOUR SPECIFIC PROVISIONS APPLICABLE TO INSURANCE COMPANIES

PRACTICING INSURANCE ON PERSONS AND CAPITALIZATION OPERATIONS

Article 57 Companies practicing the two kinds of insurance activities provided for in clause (1) of Article 4 of

this Law may not discriminate between one policy and the other of the same kind as concerns insurance rates, dividends distributed to policyholders or other conditions unless such differentiation is the result of a distinction in life expectancy as concerns policies in which the period of life is of relevant. Shall be excepted:

1- Reinsurance policies.

2- Insurance policies in amounts enjoying special discounts as per price schedules notified to the Authority.

3- Policies with special conditions on the life of the members of the same family or on groups of persons tied up with the same profession, work or any other social ties.

Article 58 The Director General may authorize the Company, upon its request, to issue policies with a

reduction on the normal rates should it have justifiable reasons for this.

Article 59 Companies practicing any of the two kinds of insurance stated in clause (1) of Article 4 of this Law

have, through an actuary, to examine the financial situation of this kind of insurance and assess the value of its standing obligations once every three years at least.

This assessment includes all insurance transactions that the Company contracted within the State and abroad, separately, and if these transactions are made through a branch of a foreign company, the assessment shall be restricted to the operations contracted or implemented within the State.

Article 60 The assessment referred to in article 59 of this Law must be done each time the Company wants to

examine its financial situation in order to determine the proportion of profits that should be distributed to shareholders or policyholders, or whenever it desires to publish this financial situation.

The Authority may require this assessment at any time prior to the lapse of three years provided that one year at least has lapsed since the last examination.

Article 61 The Implementation Regulation to this Law shall specify the data that should be included in the

expert report on the result of the examination and assessment referred to in Articles 59 and 60 of this Law.

Article 62 The Company shall send to the Authority a copy of the expert report on the result of the

examination and assessment, referred to in Articles 59 and 60 of this Law, within six months as of the expiry of the period subject of the examination accompanied with:

1- A statement of in force insurance policies concluded with the Company within the State or abroad at the date of effectuating the examination and, if the transactions were made through a branch of a foreign company, the statement shall be restricted to the policies contracted or implemented within the State.

2- An acknowledgment made by those in charge of the administration of the company that all data and information needed to reach a sound report have been made available to the expert.

Subsequent to the lapse of the six months stated in this Article, the Director General may grant an additional period to the Company to submit the report provided that the said period does not exceed three months.

Article 63 Should the Authority notice that the expert report does not reflect the true financial situation of the

Company, it shall order a reexamination, on the Company’s expense, by an actuary selected by it for this purpose.

Article 64 Companies practicing insurance on persons and capitalization insurance may not deduct, directly or

indirectly, any part of the funds allocated to meet their obligations originating from the insurance policies in order to distribute it as dividends to the shareholders or policyholders or to pay any amount other than their obligations originating from the insurance policies issued by them. Distribution of dividends shall restrictively be taken from the surplus amount designated by the expert in his report subsequent to the examination referred to in Article 59 of this Law.

In implementing the provisions of this Article, the Company’s funds within the State and abroad may be considered one entity, without prejudice to the provisions of Article 34 of this Law.

Article 65 Companies practicing insurance on persons and capitalization insurance are prohibited to issue

savings bonds for a period exceeding thirty years. Should the period of the bond be twenty five years or more, its redemption amount, after the twenty fifth year may not be less than the total amount of the mathematical reserves and the premiums that the holder of these bonds are committed to must be equal in value or progressively diminishing.

Article 66 The savings bonds must include the cancellation conditions which the Company may oppose to the

bond holder due to the delays in paying the premiums.

Cancellation of the contract may, however, occur prior to the expiry of three months from the due date of the premium, but if the bond is registered, the said period shall only start to run as of the date of the notice addressed to the bond holder through registered mail.

These instruments must also provide that the rights thereto shall devolve, upon the death of their holder, to the beneficiaries without imposing additional amounts or new conditions.

A Regulation issued by the Board, upon proposal of the Director General, shall specify the other information that must be included in the savings bonds.

Article 67 In case of bankruptcy of the Company carrying out insurance on persons and capitalization

insurance, or in case of its liquidation, the amount due to every policy holder whose policy has not expired shall be equal to the mathematical reserves of his policy at the date of bankruptcy or liquidation computed on basis of the technical tariff rules of the premiums at the date of conclusion of the policy.

CHAPTER FIVE INSURANCE AND REINSURANCE COMPANIES OPERATING IN THE STATE

FREE ZONE

Article 68 Insurance companies licensed to operate in free zones may not carry out directly any activity

outside the zone, reinsurance excepted.

CHAPTER SIX THE INSURANCE AGENT

Article 69 1- The provisions governing the Authority of the insurance agent activities and the ensuing

responsibilities shall be determined by regulations or instructions to be issued by the Board for this purpose.

2- It is prohibited for any one to perform the activities of an insurance agent before providing the Director General with the agreement between him and the Company accrediting him as an agent. He may not act as an agent for more than one company and he must fulfill the conditions provided for in Article 30 of this Law.

CHAPTER SEVEN INSURANCE BROKERS, PERIL SURVEY AND APPRAISAL ASSESSORS

INSURANCE COUNSELORS AND ACTUARIES

Article 70 No person may carry out the activities of an “Insurance Broker”, “Reinsurance Broker”, a “Peril

Survey and Appraisal Assessor”, “an “Insurance Counsel” or “Actuary” unless he is recorded in the ad hoc register under the conditions specified by the Board through regulations to be issued in this respect provided they include determination of his responsibilities, regulation of his work and the conditions of recording his name in the register. In addition, he has to meet the conditions stated in Article 30 of this Law.

CHAPTER EIGHT TRANSFER OF INSURANCE POLICIES AND CESSATION OF ACTIVITIES

Article 71 The Company may transfer the insurance policies, contracted by it in the State, with all rights and

obligations concerning any kind of insurance that it carries out to one or more other companies carrying out the same kind of insurance.

Article 72 1- An application of the transfer shall be submitted to the Director General to which shall be

appended all policies and documents pertaining to the transfer agreement. The Director General shall then direct that an announcement of the transfer be published in the Official Gazette once only, as well as twice in two local widely diffused dailies issued in the Arabic language and a local daily paper issued in the English language, on the applicant expense. The announcement must indicate that the policyholders, the beneficiaries thereof or all interested persons have the right to submit an opposition against this transfer to the Director General within forty five days from the date of the last announcement provided the object of the opposition and the reasons on which it is based are stated therein.

2- In case no opposition is filed by the concerned persons within the period referred to in clause (1) of this Article, the Director General shall issue a decision approving the transfer and this decision shall be published in the Official Gazette within one month from its issuance and shall be opposable to all policyholders, beneficiaries and debtors of the company. The funds of the company shall be transferred to the transferee company with due compliance with the provisions concerning transfer of property and the assignment of funds; provided that the transferred funds shall be exempted from registration and custody fees that are imposed by virtue of the laws on transfer of property and assignment of funds.

However, if an opposition is filed within the specified period provided that no decision shall be taken as concerns the application for transfer until after an agreement is reached between the concerned parties or a final judgment is rendered on the said opposition. The Director General may, however, decide the acceptance of the transfer provided an amount is collected, from the company, equal to its liabilities towards the opposing party including the expenses that are required for preservation of any of the company’s assets.

Article 73 The provisions set forth in Articles 71 and 72 of this Law shall apply if any company is willing to

cease its operations in the State concerning the carrying out of one or more kinds of insurance, or to free its funds that must be kept in the State for this kind, or these kinds, of insurance after submitting proof that the company has honored its obligations as concerns all policies concluded or implemented within the State in respect of the kind or kinds of insurance object of the cessation or that it has transferred these policies to another company in the manner stated in Articles 71 and 73 of this Law.

CHAPTER NINE MERGER OF COMPANIES, APPROPRIATION, RESTRUCTURING AND

LIQUIDATION

Article 74 1- Merger of insurance companies shall be governed by the provisions applicable to mergers as

provided in the Law on Commercial Companies.

2- An insurance company may only merge with another company carrying out the same kind of insurance. Any merger procedures may not commence except after submitting the merger application to the Director General to which shall be attached the reports and the necessary statements and obtain an approval from the Board.

Article 75 1- The Director General shall form an assessment committee in which membership shall include a

representative of each of the companies, their auditors, experts and specialized persons; the Director General shall appoint one of them to preside the committee.

2- The Committee referred to in clause (1) of this Article shall assess all the assets of the companies wanting to merge as well as all their rights and obligations in order to determine the net rights of shareholders at the date fixed for the merger. The Committee shall submit its report, together

with the balance-sheet of the company resulting from the merger, to the Director General within a period not exceeding ninety days from the date of referring the matter to it. The Board may, upon recommendation of the Director General, extend this period to a similar one if necessity so requires provided that the companies willing to merge shall bear in equal shares the salaries of the Committee and, in case of disagreement thereon, these salaries shall be determined by a decision of the Director General, which shall be final in this respect.

3- The Director General shall submit the Committee’s report, as well as his recommendation in its respect, to the Board. Should the latter approve the Committee’s report, the Board shall form an implementing Committee composed of the Chairmen and members of the Board of Directors of the companies wanting to merge and the auditors of these companies to carry out the merger implementation procedures in accordance with the provisions of the Law on Commercial Companies.

Article 76 1- Companies that are parties to the merger have to allow the insured to take knowledge of the

merger agreement in order to verify its clauses and this agreement should be exposed in the principal seat of each of these companies during fifteen days as of the date of publishing the merger decision in the official Gazette.

2- Every interested person is entitled to file an opposition with Board within thirty days from the date of publishing the decision concerning the merger of the companies but the opposer should specifically state the object of his opposition and the reasons on which it is based and the prejudice allegedly sustained because of the merger. In case the Board is unable, for whatever reason, to settle the opposition within thirty days from its reference to it, the opposer is entitled to resort to the competent tribunal. Neither these oppositions nor the court claim shall stay the merger decision unless the tribunal decides otherwise.

3- The Board shall issue the instructions concerning the merger procedures, the settlement of the oppositions filed in its concern and all other related matters.

Article 77 1- a- For the purposes of restructuring the company in accordance with clause (2/j) of Article 41 of

this Law, the Board may, upon the presentation of Director General wind up the Board of Directors of the company and form a neutral committee to restructure the company, from experienced and specialized persons and appoint a president and vice-president to this committee for a period not exceeding one year from the date of issuance of such decision and the company shall bear the remuneration of this committee as fixed by the Board. The committee has to submit a monthly report to the Director General on the progress of the restructuring process or whenever requested to do so.

b- The restructuring, to this end shall comprise the administration of the company and Authority of its unsound financial affairs with all its creditors with a view to determining the indebtedness of the company and the manner of settling it through approving a restructuring scheme.

2- The committee referred to in clause 1/a) of this Article has to publish a one-time announcement in the official Gazette and another, three consecutive working days, in two widely spread local dailies issued in the Arabic language and a daily local paper issued in the English language, on the company’s expense, on condition that it includes an invitation to all creditors to submit a statement of the amount of their debt supported by documentary proof, within thirty days as of the date of the last publication of the announcement. Any statement submitted by any creditor after the expiry of this period shall not be accepted.

Article 78 1- Notwithstanding any mention in the provisions of any other legislation, shall be stayed the

implementation of any seizure on the company’s funds or assets, whether by way of arrestation or distress, or any act of disposal or any execution on these funds or assets, as of the date of issuance of the restructuring decision up to the realization of any of the following instances:

a- Expiry of the period provided for in clause (1/a) of Article 77 of this Law, in case of approval of the restructuring scheme.

b- Issuance of a Board decision in accordance with the provisions of this Law rejecting the restructuring scheme.

c- Rejection by the creditors of the restructuring scheme according to the provisions of this Law.

d- Issuance of a Board decision to stay the restructuring process in accordance with the provisions of this Law.

2- Stoppage of calculation of the delays concerning the hearing of the case, due to limitation, as concerns the procedures provided for in clause (1) of this Article.

Article 79 1- The Committee shall prepare its report, concerning the restructuring scheme, within a period not

exceeding fifteen days from the date of its confirmation of the debts. The Committee shall invite the creditors to approve the restructuring scheme through the publication of an announcement in two widely spread local dailies issued in the Arabic language and a daily local paper issued in the English language provided it is approved by creditors representing not less than three quarters of the debts that are not privileged or secured by a mortgage.

2- a- In case the creditors approve the restructuring scheme, according to the provisions of clause (1) of this Article, the Committee shall submit this scheme to the Director General who in turn shall submit it to the Board with his recommendations.

b- Should the creditors disapprove the scheme prepared in accordance with the provisions of clause (1) of this Article, the Committee shall submit a report in this respect to the Director General who shall submit it with his recommendations to the Board in order to take the adequate measure according to clause (2) of Article 41 of this Law.

3- The Board may approve or disapprove the submitted scheme, according to clause (1) of this Article. In case of approval, the restructuring process shall start and, in case of disapproval, the Board shall decide to take the adequate measure in accordance with clause (2) of Article 41 of this Law.

4- Subsequent to the completion of the restructuring, a new Board of Directors shall be elected in accordance with the provisions of the Law on Commercial Companies.

Article 80 1- Should the Board notice the company’s stumbling situation despite the application of the

restructuring scheme or its uselessness, it may decide to discontinue the restructuring process and take the adequate measure according to clause (2) of Article 41 of this Law.

2- The board may, pursuant to the recommendation of the general director, issue the necessary instructions to reinstate the restructuring and the matters related thereto in accordance to the provisions of this law.

CHAPTER TEN LIQUIDATION OF THE COMPANY

Article 81 1- The liquidation of the company is governed by the provisions of this Law and the regulations

and decisions issued thereunder. Liquidation shall be carried out by one or more liquidators appointed by the General Meeting by the absolute majority required for the company’s resolutions.

Where liquidation takes place by a court judgment, the court shall specify the method of liquidation and shall appoint the liquidator.

2- The decision appointing the liquidator shall be recorded in the Commercial Register and shall be published in two widely spread local dailies issued in the Arabic language, and a local daily issued in the English language, within a maximum period of one week as of the date of its recording in the

commercial register. This appointment may not be opposed to third parties except from the date of such recording.

3- The management authority shall end when the company enters in the liquidation phase. The cadres of the company shall remain operating during the liquidation period but their powers shall be restricted to the liquidation operations which are not within the powers of the liquidator.

Article 82 1- Every interested person is entitled to attack the decision of the company’s General Meeting,

appointing the liquidator, before the competent court within forty days from the date of entry of this decision in the commercial register.

2- The appeal referred to in clause (1) of this Article shall not stay the liquidation proceedings unless the court decides otherwise.

Article 83 The discharge of the liquidator shall take place in the same manner followed for his appointment.

Any decision or judgment ordering the discharge of the liquidator must include the appointment of his replacement and must be publicized through an entry made in the commercial register and through publishing it in two widely spread local dailies issued in the Arabic language and a local daily paper issued in the English language. The discharge may not be opposed to third parties except from the date it is made known to the public.

Article 84 The liquidation decision shall entail the following:

1- Addition by the liquidator of the expression “Under liquidation” to the Company’s name in all its papers and correspondence.

2- Cease giving effect to any delegation of authority or power to sign issued by any authority in the company. The liquidator shall exclusively be authorized to give any delegation or power to sign required by the liquidation process.

3- Interrupt calculating the limitation period barring the hearing of the case concerning any rights or claims due or pending in favor of the company for a period of one year as of the date of issue of the liquidation decision.

4- Stay any judicial action and procedure taken by or against the company for a period of six months unless the court orders to resume it before the expiry of the said period, with due compliance with the provisions of clause 5 of this Article.

5- Stay any procedural or execution proceedings against the company except where they are requested by a mortgagee creditor and related to the mortgaged property, then these proceedings are stayed or not accepted for a period of six months from the date of issuance of the liquidation decision.

Article 85 The liquidator is entitled to take all the decisions and measures he deems necessary to complete the

liquidation procedure including:

1- Managing the work of the company within the limits required by the liquidation procedures.

2- Take stock of all the assets of the Company and its property and such in accord with the Board of Directors which shall commit to submit to the liquidator the assets of the Company and its books and documents.

3- Appoint any experts or persons to assist to complete the liquidation procedures or set up private committees and entrust to them any of the tasks or powers entrusted to him and issue the necessary decisions to complete the liquidation procedures.

4- Engage one or more lawyers to represent the Company under liquidation in any suit or legal proceedings related thereto.

Article 86 1- Notwithstanding any agreement to the contrary, the liquidator may take all measures he deems

necessary to protect the rights of the company, including:

a- Cancel any act or rescind any contract taken or made by the company and recover any amount paid by it during the three months preceding the issuance of the liquidation decision, in case preference is given to a specified person over the creditors of the company. The mentioned period shall be one year if the company has any ownership relation or is tied up with this person. Preferential treatment is considered existing when the act or measure is totally or partially without consideration or when it includes an appraisal of an asset or right below its real value or a property or right below its prevailing price in the market.

b- Cancel any act or rescind any contract taken or made by the company with any person having an ownership relation or is tied up with him, or recover any amount paid by the company to any of them during the three months preceding the issuance of the liquidation decision.

c- Agreement with any of the company’s debtors on the mode of payment, or payment by installments, of any amounts or obligations incumbent on them.

d- Terminate the employment of any one employed by the company with payment of his dues.

e- Anticipatory terminations of any contract made with any person.

2- The liquidator shall take any of the measures referred to in clause (1) of this Article by giving written notice to the concerned person. This process may be challenged before the court of first instance, in whose jurisdiction the principal office of the company is situated, within thirty days as of the date of serving this notice to the said person.

Article 87 1- Shall be considered void all mortgages and securities incumbent on any of the company’s

property or rights during the three months preceding the issuance of the liquidation decision. This period shall be one year if these mortgages or securities are in favor of a person having an ownership relation or is tied up with the company.

2- Shall be considered cancelled every seizure of any of the company’s property or right prior to the issuance of the liquidation decision unless the said decision is given upon request of a mortgagee creditor and relating to the mortgaged property.

Article 88 Within the context of articles 86 and 87 of this Law, a person is considered tied up with the

company in any of the two following cases:

1- If the person is an officer of the company or maintains a common business interest with an officer therein.

2- If he is the spouse of an officer in the company or a relative to this officer or to his spouse up to the third degree or if he maintains a common business relationship with any of them.

Article 89 With due compliance to the provisions of the legislations in force in the State, the liquidator has to

pay the company’s debts and sell its property whether movable or immovable by public auction or by any other means, unless the instrument of appointment provides for a sale through a specific method. The liquidator, however, may not sell the assets of the company in bulk except if authorized by the General Meeting.

Article 90 1- With due observance of the provisions relating to the insured and beneficiaries of insurance

policies, the liquidator, within thirty days from the date of issuance of the liquidation decision, has to publish a notice in a conspicuous place in two wide- spread local dailies issued in the Arabic language and in a daily paper issued in the English language, informing the creditors that they must submit their

claims against the company, whether matured or not, within two months, if they reside in the State, or three months if they reside abroad.

2- The said notice shall be published again in the same manner after the lapse of fourteen days from the date of publication of the first notice. The period of limitation of the claims shall start to run as of the date of publication of the first notice.

3- Should the liquidator or the competent court be satisfied that the creditor has a lawful excuse for not submitting his claim within the period fixed in Clause (1) of this Article, the said period shall be extended by a maximum of three additional months.

4- The period running from the date of issuance of the liquidation decision up to the date of publication of the first notice mentioned in item (1) of this article shall not be included in the computation of the period fixed for non acceptance of the claims concerning the creditors’ rights or claims towards the company under liquidation.

Article 91 1- With due observance of the provisions of [clause (2) of this Article, the liquidator shall, within

three months from the date of issuance of the liquidation decision, send the notices stated hereunder unless he deems that there are justifying reasons for going beyond this period provided that the total period does not exceed six months:

a- A notice, with acknowledgment of receipt, to each of the insured and the beneficiary under an insurance policy up to the amount of his rights and obligations.

b- A notice, with acknowledgment of receipt, claiming from each debtor the amount of debts and obligations due by him to the company.

2- An opposition may be filed with the liquidator concerning the notice mentioned in clause (1) of this Article, within thirty days as of the date of notification, failing which the insured or the beneficiary or the debtor shall be considered as acknowledging the contents of he notice.

3- The period fixed for admitting the case shall be interrupted by filing the claim submitted in accordance with clause (2) of this Article.

4- Where the notice of claim served by the liquidator to the debtor, in accordance with clause (1/b) of this Article, has become final and decisive, the liquidator may make a settlement with the debtor or execute the notice against him in accordance with the legal provisions in force.

Article 92 1- a- The liquidator shall decide the claims and oppositions submitted to him in accordance with

Articles 91 and 92 of this Law, within a period not exceeding six months from the date of their submission.

b- In case the liquidator does not give his decision within the period fixed in sub-clause (a) above, the claims and oppositions shall be considered legally rejected.

2- Every interested person may challenge, before the court of first instance within whose jurisdiction the principal seat of the company is situated, the liquidator’s decision given according to clause (1) of this Article, within thirty days as of the date of his notification of the decision or thirty days from the expiry of the six-month period referred to in clause (1/a) of this Article whichever is shorter.

Article 93 Notwithstanding any provision to the contrary in any other legislation, the liquidator may submit an

application to the competent court of first instance to lay a provisional attachment on any property of the company’s debtors or to take any provisional or summary measure against them in accordance with the legal provisions in force, taking into consideration the following:

1- Exempt the liquidator from annexing a surety bond with the application.

2- The liquidator must have issued the claim notice when submitting the said application or is about to issue it within the eight days following the issuance of the decision. The said notice shall stand for the action in substance which must be filed according to the provisions of the Civil Procedures Law.

Article 94 1- Subsequent to the issue of the liquidation decision, no creditor, debtor, insured or beneficiary

may sue the company under liquidation except on the basis and procedures provided for in this Law.

2- Considering the provisions of clause (1) of this Article, any prejudiced person from the acts or procedures taken by the liquidator may challenge it before the court of first instance in whose jurisdiction is located the principal seat of the company, in accordance with the provisions of the laws in force. The court may approve, nullify or amend these acts and procedures.

Article 95 Notwithstanding the provisions of any other law, the due debts and obligations of the company

under liquidation shall be discharged in the following order:

1- The rights of the employees and workers due for the last four months.

2- Expenses and costs incurred by the liquidator and the loans obtained by him.

3- The rights of the policyholders and beneficiaries under the insurance policies. The liquidator is bound to allocate the assets of the company representing the technical reserves to be retained according to the provisions of this Law to reimburse these obligations and every amount obtained by the company from reinsurance shall be part of these technical reserves.

4- The rights of the other debtors according to their order of privilege according to the provisions of the laws in force.

5- The rights of shareholders.

Article 96 1- The liquidator has to submit to the General Meeting, every six months, a provisional account of

the liquidation process and give all information and statements required by the shareholders on the status of the liquidation. He has to terminate his assignment within the period fixed in the deed of his appointment. In case there is no mention about this period, each partner may apply to the competent court for fixing the liquidation period.

2- The period of liquidation may not be extended except by a resolution of the General meeting after perusing a report from the liquidator on the reasons that prevented the completion of liquidation in time. Should the liquidation period be fixed by the court, it may not be extended except after securing its authorization.

Article 97 1- Upon termination of the liquidation, the liquidator shall present to the General Meeting a closing

account of the liquidation process which shall terminate after ratification of the closing account.

2- The liquidator has to publicize the liquidation in the commercial register and publish it in two wide- spread local dailies issued in the Arabic language and a daily paper issued in the English language. The liquidation shall not be opposable to third parties except from the date of such publicity. After termination of the liquidation, the liquidator shall submit an application to strike off the company from the commercial register.

Article 98 1- a- Any notice or decision issued by the liquidator shall be notified, in accordance with the

provisions of this Law, to the concerned person by delivering it to him in person or to his legal representative or by dispatching it by registered mail with acknowledgment of receipt to his last address as conserved with the company under liquidation.

b- Each notice sent according to this article shall be considered as duly delivered to the addressee should this latter refuse to receive it.

2- In case notification according to the provisions of clause (1) of this Article becomes impossible, the liquidator shall publish it, twice at least, in two wide spread local dailies issued in the Arabic language and a daily paper issued in the English language. Publication expenses shall be borne by this concerned person and such publishing shall be considered legal in all respects.

CHAPTER ELEVEN THE EMIRATES INSURANCE ASSOCIATION

Article 99 1- Insurance and Reinsurance companies subject to the provisions of this Law have to form

between themselves a professional Union called “The Emirates Insurance Association” having juristic personality and all insurance companies operating in the State shall be member in this Association.

2- The Association shall look after the interests of policyholders and the beneficiaries thereof as well as of those of its members, apply the rules of practice of the profession and represent insurance companies towards any Body or person as concerns insurance operations.

3- Subsequent to the approval of the Authority, the Association shall issue a special bye-law whereby it determines its functions, responsibilities, its relationship with the Authority, the rules and procedures of its General Meeting, the formation of its Board of Directors, the meetings of each of them, the affiliation fees, the yearly subscription fees, rules of practicing the profession and the disciplinary measures against its members and other matters within its competence.

TITLE FOUR SANCTIONS

Article 100 Shall be sanctioned by a minimum fine of Two Hundred Fifty Thousand Dirhams but not

exceeding One Million Dirhams every infringer to the provisions of clauses (1) and (2/a) of Article 24, Article 25, Article 49, sub-clause (a) of clause (2) of Article 52, clause (1) of Article 56, Article 68, clause (2) of Article 69, Article 70 and clause (1) of Article 72 of this Law.

Article 101 Shall be sanctioned to a minimum fine of Fifty Thousand Dirhams but mot exceeding Two

Hundred and Fifty Thousand Dirhams every infringer to the provisions of clauses (1), (2), (3), (4), (5), (6), (9) and (10) of Article 23; Article 34; clauses (1) and (5) of Article 36; Article 37; Article 40 and Article 116 of this Law.

Shall be sanctioned to the same penalty the liquidator who violates any of the obligations imposed on him by the provisions of this Law, as well as the bye-laws and instructions issued thereunder. This fine shall be doubled in case of recidivism.

Article 102 Shall be sanctioned to a minimum fine of One Hundred Thousand Dirhams but not exceeding Two

Hundred Thousand Dirhams every infringer to the provisions of Article 30; Article 35; Article 59; Article 64; Article 66; Article 73; clause (2) of Article 74; clause (1) of Article 76 and clause (2) of Article 117 of this Law.

Shall be sanctioned to the same penalty every person who refuses to provide the Authority with documents, information and data that must be submitted in accordance with the provisions of this Law and the regulations, the bye-laws and instructions issued thereunder; or has obstructed or prevented the General Manager or his delegate from performing their duties and competences stated in the provisions of this Law, the regulations and the bye-laws and the instructions issued thereunder; or has intervened to prevent them from obtaining this information required for the discharge of their duties;

or has refused or omitted to provide them with this information within the prescribed period. The penalty shall be doubled in case of recidivism.

Article 103 Shall be sanctioned to a minimum fine of Twenty Five Thousand Dirhams, but not exceeding Fifty

Thousand Dirhams, every infringer to the provisions of Article 31, Article 60, Article 62 and Article 65 of this Law.

Article 104 Shall be sanctioned to a minimum fine of Ten Thousand Dirhams but not exceeding Fifty

Thousand Dirhams every infringer to the provisions of Article 28; Article 32; sub-clause (a) of clause (1) and clause (2) of Article 38; clause (1) of Article 48 and Article 110 of this Law.

Article 105 Shall be sanctioned to a minimum fine of Five Thousand Dirhams but not exceeding Fifty

Thousand Dirhams every infringer to the provisions of clauses (7) and (8) of Article 23; Article (33); Article 39 and Article 55 of this Law.

Article 106 Shall be sanctioned to a minimum fine of Five Thousand Dirham but not exceeding Ten Thousand

Dirham, every infringer to any of the provisions of this Law.

Article 107 The penalties provided for in this Law shall be doubled in case of recidivism and the court may in

this case strike off the name of the company.

Article 108 Without prejudice to any severer penalty provided in any other law, crimes mentioned in this Law

shall be sanctioned by the penalties provided for therein.

Article 109 The Minister of Justice, in agreement with the Minister, shall issue a Regulation specifying the

Authority’s employees who have the capacity of judicial bailiff in the implementation of the provisions of this Law.

TITLE FIVE GENERAL PROVISIONS

Article 110 The Company has to give explanations as concerns the complaints received by the Authority from

policyholders or beneficiaries therefrom or others regarding insurance operations performed by the Company within the State.

Article 111 Existing companies, at the time this Law comes into effect, have to adjust their status to comply

with its provisions, as well as the bye-laws and instructions issued thereunder, within the period fixed by the Board provided it does not exceed two years as of the effective date of this Law.

Article 112 Should the Company refrain from adjusting its status in accordance with the provisions of Article

111 of this Law, its registration shall be stricken off by decision of the Board.

Article 113 All physical persons practicing the activities of insurance agents, brokers, Peril Survey and

Appraisal Assessors, Insurance Counselors or Actuaries are bound to comply with the provisions of this Law, the bye-laws and instructions issued thereunder, within the period fixed by the Board provided it does not exceed one year from the effective date of this Law, otherwise their registration or license, as the case may be, shall be automatically cancelled and they shall be prohibited from resuming their insurance activities, exposing themselves to legal liability.

Article 114 1- Notwithstanding anything stated in any other legislation, electronic data, data retrieved from

computers, or communications by, telex, fax and electronic mail shall be valid as evidence should they abide by their respective legislative criteria.

2- Companies shall conserve for the period fixed by law, mini pictures on microfilms or other modern technical support, instead of the original sized books, registers, statements, documents, correspondence, telegrams, notices and other papers related to their financial business. These mini pictures shall have the same weight of evidence as the originals, in accordance with the legislative criteria issued by regulation.

3- Companies, using in the Authority of their financial operations the computer or modern technical devices, shall be exempted from keeping commercial books provided for in the Law on Commercial Transactions. The information obtained from these computers, or other modern devices shall be considered as obtained from commercial books provided that the insurance companies abide by the legislative criteria decided in this respect.

Article 115 All ministries, governmental departments, public institutions and companies in which the

Government participates – and which benefit from the insurance business – shall have to submit any statements and information, concerning the insurance transactions concluded by them, that are required by the Director General within the period he fixes for this purpose.

Article 116 The Agent, broker, reinsurance broker, actuary, the Peril Survey and Appraisal Assessors and the

insurance counselors governed by the provisions of this Law are bound to submit any data or information required by the Director General within the period fixed by him.

Article 117 1- The Director General must inform the concerned body or the competent authorities, as the case

may be, of all regulations concerning them and issued by the Board or by him personally.

2- The Director General shall publish, on the Company’s expense, all regulations concerning the suspension, cancellation or reinstatement of registration or those concerning merger, appropriation, restructuring, liquidation or termination of companies, in the Official Gazette and in two wide-spread local dailies issued in the Arabic language and in a daily paper issued in the English language.

Article 118 The provisions of the Commercial Companies Law shall not apply on insurance business except to

the extent where it does not contradict the provisions of this Law, and the bye-laws, instructions and regulations issued thereunder.

Article 119 1- The Cabinet shall issue the following regulations required for the implementation of this Law:

a- The fees to be collected thereunder.

b- The minimum capital of the company.

c- The bye-laws regulating the affairs of the Authority’s employees.

2- The Board shall issue the regulations, bye-laws and instructions necessary for the implementation of this Law.

Article 120 Shall be transferred to the Public Authority the workers who the Minister decides to transfer at the

same degree with all their rights and prerogatives. Their status shall be adjusted in accordance with the provisions of the bye-laws applicable to those working for the Authority without prejudice to what they receive in salaries and allowances.

Article 121 The Persons working for the Authority shall be governed by the laws and regulations organizing

the civil service in force in the Federal government until the issuance of the bye-laws concerning those working for the Authority.

Article 122 The Federal Law no. 9 for the year 19841 on Insurance Companies and Agents referred to shall be

abrogated. The Implementation Regulation and all regulations issued thereunder shall remain in force, to the extent they are not in contradiction with the provisions of this Law, until the issuance of the Implementation Regulation to this Law.

Article 123 All provisions in violation of, or in contradiction with, the provisions of this Law are hereby

abrogated.

Article 124 The present Law shall be published in the Official Gazette and shall come into force six months

after its publication date. Promulgated by Us at the Presidential Palace On 21 Muharram 1428 H Corresponding to 15 February 2007 Khalifa Bin Zayed Al Nahyan

President of the United Arab Emirates State This Federal Law has been published in the Official Gazette, issue no. 462, p. 15.

1 The abrogated Federal Law under this Article is published in the Official Gazette no. 168, p. 92