This past year was dotted with laws that changed the UAE’s personal finance landscape — most notably insurance regulations to protect consumers, updates in the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), and a new insolvency law that will help individuals in debt. “2019 has continued with a recent trend over the last few years in which the UAE government and its regulators remain focused on reform and transformation — both to continue to keep up with the evolution of the industry but also to keep pace with international best practices,” says Jody Waugh, a partner at Al Tamimi law firm who heads the banking and finance practice. Here we talk to legal experts about the changes, what they mean for individuals and businesses in the UAE, and what 2020 has in store. The Insurance Authority first declared its intention to overhaul the industry in November 2016 in response to “an alarming amount of complaints” over how savings, investment and life insurances policies are sold in the Emirates. The government authority <a href="https://www.thenational.ae/business/money/uae-insurance-authority-pushes-ahead-with-stringent-life-insurance-regulations-1.825375">released its latest draft of the new regulations on January 31</a> of this year and the final regulations were published in the Official Gazette on October 15. That means they will come into force six months thereafter, in mid-April of next year. The measures include a commission cap of 4.5 per cent for lump sum investments and fixed-term contractual plans — in contrast to previous commission payments of up to 10 per cent. Sales advisers must also provide customers with a detailed schedule of all charges for the entirety of a policy’s life cycle and customers have the option to cancel a policy within 30 days. “We have already started receiving queries from insurers on how to structure their products,” says Anand Singh, a senior associate in the insurance and reinsurance practice at law firm BSA Ahmad Bin Hezeem & Associates. “These regulations will benefit insurers as well as policyholders in the long run and will have a positive impact on the market, although in the short term, we may see some consolidation in the insurance intermediaries space.” The Insurance Authority will now approve life insurance and other wealth insurance products before they can be sold to customers. Insurance brokers will also need to be registered as insurance producers, says Justin Carroll, a senior associate in the transport and insurance practice at Al Tamimi. “Previously, there was a loophole whereby the insurers, which were not regulated in the UAE could distribute life insurance via insurance brokers, who were registered in the UAE but were not knowledgeable about the product they were offering to the consumers,” says Mr Carroll. The Insurance Authority also issued Resolution No 33 of 2019 in July, which formed “Committees for the Settlement and Resolution of Insurance Disputes” to address complaints made by an insured person against any company licensed to carry out insurance activities in the UAE. “The committees can award damages — plus interest — in respect of the amount the customer is entitled to recover under the insurance contract,” says Mark Beswetherick, an insurance and regulatory partner at Clyde & Co in Dubai. In June, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, enacted two new laws in the DIFC: an <a href="https://www.thenational.ae/business/difc-issues-new-insolvency-law-to-address-distressed-and-bankruptcy-related-matters-1.873273">insolvency law to facilitate bankruptcy restructuring</a> and an <a href="https://www.thenational.ae/business/economy/difc-enacts-new-employment-law-that-introduces-paternity-leave-1.873697">employment law</a> to replace the one enacted in 2005. The insolvency law, No 1 of 2019, went into effect that same month and the DIFC Law No 2 of 2019 came into force on August 28. The insolvency law provides a new administration process where there is evidence of mismanagement or misconduct. It comes after the high-profile collapse last year of private equity firm Abraaj. The employment law contains several updates, including the introduction of five days’ paternity leave for the first time, safeguards against discrimination, changes in sick pay and gratuity protection. For example, while discrimination was addressed in the 2005 law, it was limited and offered no way of recourse, says Shiraz Sethi, regional managing partner and co-head of employment at legal services firm DWF Middle East. “Age, maternity, pregnancy have all been added into the mix as a protective characteristic of a discrimination claim, but also now the discrimination claim actually has a remedy,” Mr Sethi says. “Potentially you could claim up to a year’s salary if you can prove that you have been discriminated against or victimised during your employment.” In the past, employers were able to withhold gratuity payments if employees were fired for cause. With the new employment law, “your end-of-service gratuity will no longer be affected”, says Mr Sethi. “The DIFC is trying to align themselves with international standards and best practice and, therefore, the end-of-service gratuity is seen as a savings pot that shouldn’t be touched.” At the same time, the DIFC is introducing a revised employment contribution plan to replace gratuity, known as the DIFC Employee Workplace Savings Plan (Dews). This <a href="https://www.thenational.ae/business/money/how-difc-s-new-savings-scheme-is-evolving-as-it-nears-january-roll-out-1.930708">was scheduled to be rolled out January 1</a>, but has been postponed to February 1 to give employers more time to implement either the new plan or another "qualifying alternative scheme". Under the current gratuity system, employers have to pay 21 days of an employee’s basic wage for each year of the first five years of service and 30 days of the wage for each additional year of service. The Dews scheme imposes mandatory contributions from employers on a monthly basis into a fund that will generate returns for employees. Nathan Banks, managing partner at Banks Legal Consultancy, says the Dews scheme is a positive development in that it “puts an end to an open-ended liability in terms of end-of-service benefits and encourages transparency vis-à-vis the employees — the contributions being fixed and foreseeable.” ADGM, the financial free zone that opened in 2015, <a href="https://www.thenational.ae/business/money/adgm-issues-new-employment-regulations-1.929939">issued its new Employment Regulations in October</a>. Coming into effect on January 1, the changes include the introduction of overtime compensation and a repatriation flight ticket allowance. As in the DIFC, it reduced sick pay to more closely align with international standards. “A positive change for the employers is that sick pay will be reduced from 60 to 10 days of full pay, 20 days at half pay and 30 days without pay in a 12-month period, after which an employer may dismiss an employee with written notice,” says Alina Ponomarova, an associate in employment and incentives at Al Tamimi. The <a href="https://www.thenational.ae/uae/government/new-uae-law-to-protect-and-support-emiratis-and-residents-in-debt-1.938818">UAE Cabinet passed a new insolvency law</a>, Federal Decree Law No 9 of 2019, last month to protect and support individuals in debt. The law comes into force in January and will help debtors settle their financial obligations through a court-appointed expert. “The introduction of the new insolvency law is a welcomed legislative development in the UAE as no prior provisions existed under the regulations protecting people in financial indebtedness against legal prosecution,” says Mr Banks. The new law “will increase transparency in civil debts and promote financial security”, he adds. In 2020, it is possible that UAE could get a unified financial services regulator, merging the Securities and Commodities Authority and the Insurance Authority. In September of this year, the UAE government issued a resolution to form a 10-member committee to prepare the legislation necessary to merge the two bodies. The committee has been tasked with completing this work within six months, meaning by March 2020. There are many jurisdictions which have a single regulator overseeing the financial services sector, such as the Central Bank of Bahrain, the Capital Markets Authority in Oman and the UK Financial Conduct Authority, says Peter Hodgins, an insurance partner at Clyde & Co in Dubai. “Any merger will provide a consolidated regime which clearly regulates all financial services products distributed in the UAE,” Mr Hodgins says. As for potential employment law updates in the new year, Mr Sethi of DWF says the Federal Labour Law, which was adopted in 1980, is due for a revamp to keep up with changes at the DIFC and ADGM. “That’s really what I’m expecting next,” he says.