UAE Central Bank Implements Stricter Licensing Framework for Insurance Companies

The Central Bank of the UAE (CBUAE) has introduced the Insurance Company Licensing Regulation (Circular 4/2026), establishing a stricter licensing framework for insurance entities seeking authorisation to conduct business in the UAE. The updated framework governs the licensing of domestic insurance companies and branches of foreign insurers, as well as the establishment of branches and subsidiaries within and outside the country. It also classifies insurance business categories and outlines requirements for registration, annual renewal, and the commencement of activities.

Under the new regulation, the CBUAE mandates heightened scrutiny over capital adequacy, corporate governance structures, risk assessment protocols, and operational resilience. The central bank stated that the regulation aims to prevent undercapitalised operations, elevate regulatory compliance, bolster consumer protection, and support the broader governance of financial institutions and insurance businesses in the UAE.

According to legal experts at Pinsent Masons, market entry will no longer be treated as a purely technical exercise. The CBUAE will evaluate an applicant's commercial proposition, focusing on whether the company offers products in strong demand, introduces products currently absent from the UAE market, and helps increase domestic premium retention. The robustness of the business plan and the qualifications of founders and shareholders are explicitly listed as grounds upon which the regulator may reject an application.

The framework also establishes strict rules for foreign insurers seeking to write business onshore. International insurance groups cannot rely solely on authorizations from their home jurisdiction. Additionally, entities incorporated in financial free zones, including the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), will be treated as foreign insurance companies and must secure a CBUAE licence to operate onshore.