Al Tamimi & Company, in collaboration with Axxion Claims Settlement Services, has highlighted the operational implications of the UAE's consolidated Central Bank framework for motor claims as insurers prepare for the September 2026 reconciliation deadline under Federal Decree-Law No. 6 of 2025.
The law, which came into force in September 2025, places banking, financial institutions and insurance businesses under a unified supervisory framework. Article 184 grants regulated entities a one-year period to align their operations with the new requirements, while allowing the Central Bank's Board of Directors to extend the deadline if necessary.
Focus Shifts from Legislation to Day-to-Day Claims Handling
While the legal framework is already familiar across the insurance industry, Al Tamimi & Company and Axxion said the greater challenge lies in understanding how the new requirements affect the day-to-day handling of individual motor claims.
Rather than focusing on policy documentation, the organisations said insurers should examine where compliance obligations arise throughout the claims process and ensure operational procedures are updated accordingly.
Anand Singh, Legal Director and Head of Insurance, GCC, at Al Tamimi & Company, said the framework aligns the UAE with international insurance supervision standards established by the International Association of Insurance Supervisors (IAIS).
He noted that while the legislation includes substantial penalties for non-compliance, regulators are primarily focused on ensuring firms actively identify compliance gaps and implement remediation measures.
Stronger Governance and Licensing Requirements
The framework introduces enhanced governance responsibilities at board level under Article 130 and expands licensing requirements to include insurance-related professions such as third-party administrators and loss adjusters under Article 61(1)(j).
It also imposes direct obligations relating to data provision and disclosure through Articles 90 and 91.
Under Article 168, the legislation provides for 21 administrative sanctions, including fines of up to AED 1 billion for licensed financial institutions and AED 5 million for authorised individuals.
Multiple Laws Now Shape Claims Processes
The firms noted that three additional legislative and regulatory measures now intersect with motor claims handling.
These include Federal Decree-Law No. 25 of 2025, which introduced the UAE's new Civil Code and reinforces insurance contract provisions relating to disclosure and indemnity, and Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data, which grants claimants the right to access personal information contained within claims files.
They also highlighted the Central Bank's Guidance Note on the Responsible Adoption of Artificial Intelligence and Machine Learning by Licensed Financial Institutions, issued in February 2026, which establishes principles centred on transparency, explainability and human oversight when AI is used in decision-making.
Insurers Remain Accountable for Outsourced Functions
Singh said insurers continue to bear responsibility for any claims functions performed by third-party service providers.
He explained that due diligence, service standards, data governance and audit trails remain board-level responsibilities even where operational activities are outsourced.
However, he noted an important distinction between appointing a Central Bank-licensed loss adjuster, which falls outside the outsourcing provisions, and engaging an unlicensed third party, which remains subject to outsourcing rules.
Real-Time Documentation Becomes Essential
From an operational perspective, the framework requires insurers to create and maintain claims records in real time, ensuring that decisions, supporting evidence and timelines are documented as claims progress.
According to the firms, maintaining comprehensive records not only supports regulatory compliance but also strengthens underwriting practices, fraud detection capabilities and data quality across the insurance sector.
Compliance Must Be Embedded into Daily Operations
Frederik Bisbjerg, Managing Director and Co-founder of Axxion Claims Settlement Services, said the practical application of the framework will determine its success.
He explained that compliance requirements arise during routine claims decisions, such as assessing repair estimates, issuing rejection letters and closing claim files, making operational readiness critical for insurers.
Bisbjerg added that the interaction of four separate legal and regulatory instruments effectively creates a single operational framework for claims handling.
He said insurers must ensure that claim decisions are properly linked to policy coverage, that claims files remain fully disclosable to customers where required, and that any automated decision-making processes can be clearly explained, enabling organisations to manage compliance more efficiently ahead of the September 2026 deadline.
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