Dubai - MENA Herald: The Dubai Financial Services Authority (DFSA) has imposed a fine of USD 85,191 (AED 312,650.97) on Clements (Dubai) Limited (CDL). The fine was imposed following a DFSA investigation conducted in collaboration with the Insurance Authority of the United Arab Emirates (UAE). The investigation found that, from January 2014 to July 2014, CDL engaged in prohibited insurance activities in breach of DFSA administered Rules. The fine includes the giving up of commissions earned by CDL from the prohibited activities.
CDL is authorised by the DFSA to provide the Financial Service of Insurance Intermediation in the Dubai International Financial Centre (DIFC). In providing this service, CDL is restricted under DFSA Rules from intermediating a Contract of Insurance for a risk situated in the UAE unless:
the risk is situated in the DIFC; or
the contract is one of re-insurance.
The DFSA’s investigation identified that CDL provided prohibited Insurance Intermediation services in breach of DFSA Rules on 21 occasions and failed to have adequate systems and controls in place to detect, monitor and prevent such activities from occurring.
The DFSA discounted the amount of the fine imposed on CDL after taking into consideration CDL’s initiative to self-report the misconduct to the DFSA, take
steps to remediate its deficiencies and co-operate fully with the DFSA's investigation.
The DFSA also notes that CDL voluntarily appointed a new Senior Executive Officer, and Compliance and Money Laundering Reporting Officer.
CDL agreed to settle the DFSA's action at an early stage of the investigation, and therefore qualified for a further discount under the DFSA's policy for early settlement. Were it not for the mitigating factors and settlement discount, the DFSA would have imposed a fine of USD 102,191 (AED 375,040.97).
Mr Ian Johnston, Chief Executive of the DFSA said: “Intermediating direct insurance in the UAE (outside of the DIFC) is prohibited by DFSA administered legislation and the UAE Federal Law. The DFSA will take appropriate action against firms in the DIFC that engage in any unlicensed insurance activities.
We worked closely with our colleagues at the UAE Insurance Authority on this matter, and I am grateful to the Authority for their co-operation and assistance.”