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DFSA fines Clements Dubai Limited over prohibited insurance

Staff Writer | September 27, 2016
The Dubai Financial Services Authority, DFSA, has imposed a fine of over AED 300,000 on Clements Dubai Limited, CDL.
Emirates   Fine of AED 312,650.97
The fine was imposed following a DFSA investigation conducted in collaboration with the Insurance Authority of the 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 these prohibited activities.

The authority explained that 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 these rules on 21 occasions and failed to have adequate systems and controls in place to detect, monitor and prevent such activities from occurring.

The authority discounted the amount of the fine imposed on CDL to AED 312,650.97 after taking into consideration the company's initiative to self-report the misconduct to the DFSA, taking steps to remediate its deficiencies, and co-operate fully with the DFSA investigation.

The authority also notes that CDL voluntarily appointed a new senior executive officer, and compliance and money laundering reporting officer.

CDL agreed to settle the DFSA 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 AED 375,040.97.