UAE's New Insurance Licensing Rules: Central Bank Circular 4/2026 Makes the Business Plan Central, Limits Foreign Insurers to Branches and Adds Personal Sanctions

The rules for getting an insurance licence in the United Arab Emirates changed on August 14, 2026, and the change is larger than a routine update. According to the law firm Al Tamimi & Company, the Central Bank of the UAE's Insurance Company Licensing Regulation, issued as Circular No. 4/2026, came into force on that date. It replaces Insurance Authority Board of Directors' Resolution No. 2 of 2009, which was the executive regulation under Federal Law No. 6 of 2007. Its legal basis is Federal Decree-Law No. 6 of 2025, and it is to be read together with the central bank's regulations on corporate governance, risk management, fitness and propriety, takaful and minimum capital. Mondaq's summary of the wider legal change explains the background: the 2025 law put banking and insurance supervision under one federal framework run by the central bank, and the former Insurance Authority was merged into it.

The regulation applies to insurance companies, branches of foreign insurers and prospective entrants. Pinsent Masons, in an Out-Law article dated September 29, 2026, adds that insurers incorporated in the Dubai International Financial Centre and Abu Dhabi Global Market are treated as foreign insurers for this purpose. It covers the licensing of insurers and foreign branches, the establishment of insurance branches and subsidiaries inside and outside the UAE, classes of insurance business, and registration, annual renewal and commencement of activities. Al Tamimi notes that the main product classes, life and family, health, personal accident, funds accumulation, property and liability, are substantially unchanged, so existing licensees do not need to be reclassified.

The most visible structural change concerns foreign insurers. Under the regulation, a foreign insurer may be licensed only as a branch, and that includes companies established in the financial free zones. Agent-based licensing is no longer provided for. Pinsent Masons stresses that a foreign insurer writing business onshore needs a central bank licence, that authorisation from its home regulator is not sufficient, and that licences granted in the DIFC and ADGM do not extend onshore. Jessa White, a managing senior associate at the firm, said such insurers cannot rely on their existing home regulator's authorisation. Branches must provide a bank guarantee under Article 95 of the Central Bank Law, according to Annex 1 as described by Al Tamimi.

The process has fixed time limits. Al Tamimi sets out four stages. An application counts as formally received only once it is complete. Applicants then have 60 business days to correct deficiencies; if they do not, the application lapses and they cannot reapply for six months. The central bank must decide within 60 business days, and it must notify its decision within 20 business days, giving reasons for any rejection. These timelines give applicants more certainty, but the six-month bar penalises incomplete filings, which is why Al Tamimi advises preparing the documentation carefully before filing. Annex 1 requires material on group structure, ICT and cybersecurity systems, outsourcing arrangements and Emiratisation plans.

The criteria are where Pinsent Masons sees the biggest shift. Marie Chowdhry, a partner in financial regulation at the firm, called it "a commercially significant change since licensing is no longer a purely technical exercise." The regulator will look at the applicant's commercial proposition, including whether it brings products that the UAE market lacks or that are in strong demand, and whether it will increase the share of premium retained in the country. Refusal grounds expressly include the qualifications of founders and shareholders, the fit and proper process, the robustness and viability of the business plan, and the readiness of corporate governance and risk management. Jessa White advised applicants to treat the business plan as the centre of the application and not as a supporting document. The commentary does not say how the market-contribution test will be weighed against other factors, so its practical effect will become clearer from the regulator's decisions.

Supervision after licensing is also tougher. Al Tamimi reports that the central bank may amend, revoke or impose new licence conditions at any time. It may close a UAE branch for false information, breach of approval conditions, non-compliance or 12 months of inactivity. Companies can apply to withdraw a licence in whole or in part. Sanctions are no longer limited to suspending licensed activity: the regulator may withdraw, replace or restrict the powers of senior managers or board members, impose interim management or bar individuals from the UAE insurance sector. The articles do not give fine amounts under this regulation. Separately, Mondaq notes that unlicensed financial activity under the wider law can bring imprisonment, a fine of AED 50,000 to AED 500 million, or both.

The regulation sits alongside a broader clean-up of who may carry on insurance-related business. Mondaq explains that insurance, reinsurance, takaful and retakaful, and professions such as agents, brokers, surveyors and loss adjusters, consultants, actuaries and health third-party administrators need a licence from the central bank or a financial free zone regulator. Non-financial free zones such as DMCC, JAFZA and RAKEZ fall under the federal law, so a central bank authorisation or no-objection is mandatory there. A DMCC circular of July 1, 2024 required insurance-related entities to obtain a no-objection certificate, and the transition period ended on December 31, 2025. Businesses without one are described as being in breach of both free-zone requirements and federal law. Affected firms can obtain central bank licensing or move to the DIFC or ADGM, depending on their activity and customers.

Some points are not covered by the published commentary. Al Tamimi's article refers to the minimum capital regulation but gives no capital figures, and neither it nor Pinsent Masons states a transition period for existing licensees. Al Tamimi does not give the date the circular was issued. Anyone planning an application or relying on the rules should therefore read the text of Circular 4/2026 and the related capital regulation directly, and take advice, since this article summarises law-firm commentary and is not legal advice.