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The Capital of Health Insurance Must be Raised in UAE

DubaiThe health insurance sector in needs to manage necessary requirements, setting the stage for the possible rollout of mandatory medical coverage. Third-party administrators (), who play a key role in the health insurance provisioning, have increased their stakes. Now, a minimum capital base of Dh5 million is required.

Mustafa Vazayil, managing director of Gargash Insurance Services said “The TPAs were not regulated and as a limited liability company they could earlier operate with a capital of Dh300, 000 also. The Dh5 million requirements is a reasonable beginning”. In order to follow professional standards practiced universally the TPAs must also submit an insurance policy to the authority.

The individual company’s financial accounts and those related to health insurance must be separated due to the new regulations. Also, they are prevented from offering services to companies not licensed or operational in the UAE. “The UAE has seen more regulations and increased supervision in recent times and this regulation is a part of this overall review” commented Dr. Walid Koudsi, head of employee benefits and managed care services at Insighters Insurance Brokers.

He added “There is a likelihood of medical insurance becoming mandatory in as well as some other emirates and this guideline will ensure TPAs operating in the UAE are well capitalized and equipped to discharge their role effectively. The Dh5 million cap however could have been pegged higher at Dh10 million to ensure that only serious well-capitalized entities operate in the sector”.

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