CBUAE Sanctions Five Insurance Brokers for AML and Sanctions Compliance Failures

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CBUAE sanctions 5 insurance brokers. Regulatory crackdown continues under the UAE's new 2026 financial laws.

Central Bank of the UAE imposed financial penalties on two insurance brokers and issued written warnings to three others on 12 May 2025.
Sanctions follow supervisory examinations that identified failures in Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) frameworks and sanctions controls.
Action taken under Article (14) of Federal Decree-Law No. (20) of 2018 on AML/CFT, which empowers CBUAE to impose administrative and financial penalties.
Federal Decree-Law No. (6) of 2025 consolidates CBUAE's regulatory authority over insurance business and strengthens enforcement powers from 2026.
Enforcement reflects UAE's commitment to meeting Financial Action Task Force (FATF) standards and intensifying compliance expectations across financial institutions.
Insurance brokers must maintain robust governance, customer due diligence, transaction monitoring, and sanctions screening systems comparable to banks.

Federal Decree-Law No. (6) of 2025 Strengthens Regulatory Oversight

The Central Bank of the UAE (CBUAE) has signalled its intention to enforce stricter compliance standards across insurance intermediaries following sanctions against five brokers in May 2025. The penalties were imposed under Article (14) of Federal Decree-Law No. (20) of 2018, which addresses Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) violations. This enforcement action arrives as Federal Decree-Law No. (6) of 2025 prepares to consolidate CBUAE's supervisory powers over insurance business from 2026, aligning the UAE with Financial Action Task Force (FATF) recommendations.

The new legislative framework places insurance brokers within the same prudential and conduct regime as banks and other financial institutions. Industry observers view the sanctions as a clear indication that the Central Bank expects intermediaries to maintain AML/CFT systems of comparable rigour to larger licensees, particularly as the UAE continues to strengthen its reputation as a transparent and well-regulated financial centre.

Details of the Sanctions

On 12 May 2025, the CBUAE announced it had imposed administrative and financial sanctions on five insurance brokerage firms operating in the UAE. The action followed supervisory examinations which identified failures by these brokers to comply with the UAE's AML/CFT framework and related sanctions obligations. Two brokers received financial penalties, while the remaining three received formal written warnings.

The Central Bank's official statement confirmed that the sanctions resulted from the companies' failure to maintain adequate systems and controls for detecting and preventing money laundering and terrorism financing. Although the CBUAE did not name the sanctioned firms, the public disclosure serves as a deterrent message to the wider market about the consequences of non-compliance.

Legal Framework and Enforcement Powers

The specific sanctions were imposed under Article (14) of Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations. This provision empowers competent authorities, including the CBUAE, to impose administrative and financial penalties on regulated entities for violations of AML/CFT obligations. Article (14) provides the framework for measures such as warnings, fines, restrictions, or licence revocation where entities fail to implement adequate detection and reporting systems.

The enforcement action is now being interpreted within the context of Federal Decree-Law No. (6) of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business. This decree-law, often referred to as CB Law 2025, repeals and replaces the earlier 2018 Central Bank Law and consolidates CBUAE's regulatory and supervisory powers across banking, insurance and other licensed financial activities into a single legislative instrument.

CB Law 2025 defines insurance brokers and other insurance-related professions as persons subject to CBUAE supervision. The law grants the CBUAE Board wide powers to determine licensing conditions, approve prudential and conduct regulations, and take enforcement actions including administrative penalties where institutions fail to comply. Legal commentators note that the law overhauls the UAE's financial regulatory framework and integrates insurance business under a modern statute that enhances the Central Bank's ability to enforce consistent standards.

Regulatory Expectations for Insurance Brokers

The CBUAE has publicly reiterated that insurance brokers and insurance-related professions must maintain risk-based AML/CFT frameworks. These requirements include governance structures with clear responsibility for AML/CFT oversight at board and senior management level, written policies and procedures designed to identify and mitigate money-laundering and terrorism-financing risks, and customer due diligence processes for higher-risk clients and transactions.

Brokers must also implement ongoing transaction monitoring and sanctions screening against relevant UN, UAE and other prescribed lists, and ensure timely reporting of suspicious transactions to the UAE's Financial Intelligence Unit (FIU). Compliance commentators emphasise that insurance products, particularly life and investment-linked contracts, can be misused for layering and integration in money-laundering schemes. Brokers therefore play a frontline role in detecting unusual patterns, beneficial ownership issues and cross-border risk factors.

Implications for the Insurance Sector

Specialist AML and compliance platforms characterise the CBUAE's sanctions as decisive regulatory action and a cautionary lesson to intermediaries about the importance of maintaining robust compliance frameworks. Industry summaries describe the violations as deficiencies in AML/CFT compliance frameworks and sanctions controls, including failure to implement adequate systems, insufficient risk assessment, and gaps in screening and monitoring processes.

Consultancy and advisory firms use the case to remind insurance brokers that they should conduct comprehensive reviews of their AML/CFT frameworks, ensure sanctions screening tools and transaction monitoring systems are properly implemented, provide regular staff training on AML/CFT obligations and red flags, and document remedial actions for the CBUAE. The use of both financial penalties and warnings illustrates a tiered enforcement approach where the Central Bank calibrates sanctions based on the gravity and persistence of non-compliance.

The enforcement action is linked to a broader trend of intensified CBUAE enforcement, which is expected to continue and expand under CB Law 2025 as it becomes fully operational in 2026. Future enforcement actions against insurance brokers, including those related to AML/CFT, solvency, conduct of business and consumer protection, will increasingly be framed under the new law and its implementing regulations rather than under older insurance-specific decrees.