Summary
On 8 September 2025, the UAE issued Federal Decree-Law No. 6 of 2025 Regarding the Central Bank, the Regulation of Financial Institutions, their Activities, and Insurance Business (the Law).
Effective 16 September 2025, the Law replaces previous frameworks and consolidates supervision under the Central Bank of the UAE (CBUAE). With a one-year transition period ending on 16 September 2026, insurance entities must adapt to stricter licensing and operational standards.
Key points:
- Repeals Federal Decree-Law No. 14 of 2018 on the Central Bank and Federal Decree-Law No. 48 of 2023 on insurance activities
- Integrates banking and insurance regulation under the CBUAE, excluding Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM)
- Administrative fines up to AED 1 billion for institutions, fivefold increase from AED 200 million under the 2018 Law
- Expands licensing to virtual assets, decentralized finance, and the Digital Dirham
- Entities in non-financial free zones (DMCC, JAFZA, SAIF Zone, RAKEZ, Meydan) conducting insurance-related activities must obtain No Objection Certificates (NOCs) from CBUAE by 31 December 2025
- Unauthorized Licensed Financial Activities (LFAs) punishable by imprisonment and fines ranging from AED 50,000 to AED
What Is Federal Decree-Law No. 6 Of 2025?
Federal Decree-Law No. 6 of 2025 represents a comprehensive update to the UAE’s financial regulatory landscape. The Law emerged from a process that began in 2020 when the UAE Cabinet approved the merger of the Insurance Authority with the Central Bank, creating a single framework for regulating banking and insurance sectors.
Issued on 8 September 2025, gazetted on 15 September 2025, and effective on 16 September 2025, the Law provides a one-year transitional period until 16 September 2026 for entities to reconcile their operations with new requirements. It repeals Federal Decree-Law No. 14 of 2018 and Federal Decree-Law No. 48 of 2023, while Article 183 preserves existing regulations until expressly replaced.
What Are The Main Objectives And Scope?
The Law promotes financial stability, strengthens supervision, and integrates sustainable finance and digital technologies, applying to all persons and institutions conducting Licensed Financial Activities in the UAE, excluding DIFC and ADGM.
How Does The Regulatory Framework Change?
Consolidation of Oversight: Banking and insurance regulation are integrated into a single statute administered by the CBUAE. Previously governed separately under the 2023 Insurance Law, all prudential and conduct supervision now falls under the Central Bank.
Enhanced Supervisory Powers: The CBUAE is granted broad early intervention and resolution powers, including recovery planning, capital and liquidity measures, management changes, asset transfers, liability write-downs, and establishing bridge institutions.
Stronger Enforcement: Administrative fines may reach AED 1 billion for institutions or ten times the value of the violation, and up to AED 5 million for Authorised Individuals. The CBUAE may collect and publish penalties, while specialized judicial committees issue final and enforceable decisions for financial disputes up to AED 100,000.
Emerging Technologies: Articles 62 and 187 extend licensing requirements to technology-enabled financial activities and formally recognize the Central Bank’s digital currency, providing statutory footing for the Digital Dirham.
Consumer Protection: Article 149 requires fraud prevention measures, prompt customer notification of security breaches, and cooperation with Central Bank investigations, while mandating transparent disclosure of fees, terms, and risks and strengthening customer confidentiality with defined exceptions for supervision, court orders, and Anti-Money Laundering/Combating the Financing of Terrorism compliance.
What Changes Apply To Insurance Regulation Specifically?
Insurance activities, including licensing, solvency, actuarial oversight, and Takaful operations, fall fully within the CBUAE’s supervisory remit. The Law defines “Insurance Company (Insurer)” as any juridical person licensed to carry on insurance business and activities in the State, “Reinsurance Company” as any juridical person licensed to carry on reinsurance business, and “Takaful Insurance” as a scheme achieving solidarity among participants to address risks in accordance with Islamic Shari’ah principles.
The Higher Shari’ah Authority is preserved with enhanced remit for Islamic financial institutions, including Takaful operations, ensuring binding resolutions on Shari’ah compliance. Creditor hierarchies in resolution prioritize customers, including insured parties.
Who Needs An Insurance License?
No person may conduct a Licensed Financial Activity without a CBUAE license in onshore UAE or non-financial free zones. Articles 61 and 62 include insurance and Takaful-related activities and professions such as agents, brokers, surveyors, consultants, actuaries, Third Party Administrators (TPAs), and extend licensing to technologies enabling these activities.
These requirements apply to all companies operating in the UAE, whether foreign or domestic. For foreign insurance companies, the requirement applies to the company licensed to operate within the UAE, not the foreign parent entity.
The CBUAE has streamlined licensing via electronic submission, requiring a full application package, including policy terms, technical and pricing bases (actuary-certified), contract specimens, surrender value schedules, and a UAE bank certificate confirming a fixed deposit of AED 6 million (property and liability) or AED 4 million (persons and fund accumulation). The CBUAE may grant in-principle approval, with requirements to be completed within one year.
What Are The Requirements For Free Zones?
Entities in non-financial free zones, such as DMCC, JAFZA, SAIF Zone, RAKEZ, and Meydan, must obtain a No Objection Certificate (NOC) from the CBUAE to conduct insurance-related activities. The transition period ended on 31 December 2025, after which operations without approval constitute a breach of federal laws and free zone directives.
DMCC issued a circular on 1 July 2024 requiring NOCs for insurance activities. Financial free zones like DIFC and ADGM are exempt, remaining under local supervision.
What Are The Penalties For Non-Compliance?
Persons engaging in Licensed Financial Activity without a license face imprisonment and fines between AED 50,000 and AED 500 million. A minimum fine of AED 1 million applies for carrying on or promoting Licensed Financial Activities without authorization.
Broader enforcement includes fines up to AED 1 billion for institutions and AED 5 million for individuals, along with license revocation and disgorgement of gains. The CBUAE may collect penalties directly from accounts and publish them on its website. Criminal provisions address unlicensed activities, breaches of license conditions, violations of early intervention or resolution directions, misuse of restricted designations, confidentiality breaches, and obstruction of examinations.
What Are The Transitional Arrangements?
Article 184 provides a one-year transitional period until 16 September 2026 for entities to regularize licensing and compliance. Legacy regulations issued under the 2018 Law and 2023 Insurance Law remain effective until replaced. The CBUAE has discretion to extend this period for specific entities or activities. For non-financial free zones, the NOC transition ended on 31 December 2025.
In December 2025, the CBUAE Board approved three new regulations on insurance licensing, brokerage, and telemarketing under Cabinet Resolution No. 56 of 2024, reviewed progress on the “Jisr” CBDC platform, and approved the Central Bank’s 2026 budget.
What Are The Implications For The Insurance Sector?
For Insurance Companies: Companies must review recovery and resolution planning, governance structures, and related-party controls. Prudential requirements, including capital, liquidity, and reporting standards, must be updated. Consumer protection, cybersecurity, and fraud controls should be enhanced to meet Article 149 obligations.
For Insurance Intermediaries: Brokers, agents, and other intermediaries must meet licensing requirements under the expanded definition of insurance-related professions. The new Insurance Brokers’ Regulation, approved in December 2025, strengthens supervision and requires updates to internal policies.
For Technology Providers: Fintech companies and technology providers enabling insurance services must assess whether they fall within the expanded regulatory perimeter under Article 62. Platforms facilitating insurance distribution, claims processing, or premium collection may require licensing.
The Law establishes fit-and-proper standards for board members and Authorised Individuals. The CBUAE must pre-approve appointments and may refuse or remove candidates to protect public interest. Related-party transactions are restricted.
Key Takeaways
Federal Decree-Law No. 6 of 2025 has reshaped the UAE’s financial regulatory environment, with effects on insurance licensing effective from 2026.
Key requirements include obtaining CBUAE licensing for insurance-related activities in onshore UAE and non-financial free zones, securing NOCs for non-financial free zone operations by 31 December 2025, complying with enhanced prudential standards and governance requirements, and implementing fraud detection, cybersecurity, and ESG systems.
The transitional period until 16 September 2026 provides a clear compliance timeline. Stakeholders must ensure adherence through proactive assessment of operations, updating governance and compliance frameworks, and engagement with the CBUAE, often with guidance from experienced corporate law firm and lawyers in UAE advising on regulatory transition and enforcement risk.
Authors: Shantanu Mukherjee, Alan Baiju
