Insurance Law in RAK ICC: Complete Guide

What RAK ICC is, and what it is not

Companies regularly ask whether they can run an insurance operation through a RAK ICC company, or whether their RAK ICC holding vehicle is covered by the group's insurance programme. The two questions have different answers, and both start from the same point: the RAK International Corporate Centre is a corporate registry. It incorporates and maintains companies. It is not a financial services regulator, and it does not issue licences to underwrite, broker or intermediate insurance.

That single fact resolves most of the confusion. If the plan involves accepting risk for premium, placing risk for a commission, or handling claims for someone else, the permission has to come from an authority that grants those permissions. At federal level, insurance supervision sits with the Central Bank of the UAE. The DIFC and ADGM run separate regimes under the DFSA and the FSRA respectively, each with its own courts and its own rulebook. A RAK ICC certificate of incorporation is not a substitute for any of them, and no amount of drafting turns it into one.

Where a RAK ICC company legitimately fits in an insurance structure

Used for what it is, the vehicle has real uses.

• Holding shares in a regulated insurer or broker. The regulated entity holds the licence; the RAK ICC company sits above it in the ownership chain. Expect the regulator to look through to ultimate beneficial owners and to require notice of changes in control.
• Holding assets that need insuring. Property, vessels, aircraft and equipment are frequently owned by a separate company. That company is then the insured, and the policy has to name it correctly.
• Sitting as a contracting party in a group programme. Where a master policy covers several entities, each one needs to appear in the schedule or in the definition of the insured.

What it does not do is confer any right to sell insurance to third parties, in the UAE or elsewhere. Marketing cover from a RAK ICC company because the registry does not prohibit it is a poor argument in front of the authority that does.

The problems that actually arise

The insured entity is named wrongly

This is the most common failure and the most avoidable. Group structures change, a new holding company is inserted, assets are transferred, and the policy schedule keeps naming the entity that used to own them. At claim stage the insurer points out that the named insured has no insurable interest in the loss. Reconcile the ownership register against the policy schedule every renewal, and treat any restructuring as a trigger for an endorsement.

Nobody can produce the corporate record

RAK ICC companies act through a registered agent, and the corporate file lives with that agent rather than in the office of whoever runs the business day to day. When an insurer or a court asks who the directors are, who signed the proposal form and whether that person had authority, the answer has to come out of the register and the resolutions. Firms that have not looked at their corporate file since incorporation discover at the worst possible moment that the directors on record resigned years ago. Keep the register current, keep signed resolutions for anything that binds the company, and know how quickly your agent can produce a certificate of incumbency.

Disclosure at inception

Where an offshore vehicle owns the risk, insurers ask about ownership, control and the source of the assets. Answer the proposal form accurately and keep the file showing what was disclosed. Non-disclosure is the standard defence to a claim, and a structure that looks opaque from the outside gives the point extra weight.

Substance and where the company is actually run

A company incorporated in one place and managed from another attracts questions from insurers, banks and tax authorities alike. Record where board decisions are taken and by whom. This is administrative work, not legal argument, and it is far easier to do contemporaneously than to reconstruct.

Governing law, forum and enforcement

A policy issued to a RAK ICC company can be governed by whatever law the parties choose, subject to any mandatory local requirement, and this needs deciding rather than inheriting from a broker's template. If the insurer is licensed onshore, expect UAE law and the onshore courts, working in Arabic, unless the contract says otherwise. Arbitration is governed by Federal Law No. 6 of 2018, amended in 2023. DIAC now administers cases that would previously have gone to DIFC-LCIA, abolished by Dubai Decree No. 34 of 2021, while the DIFC remains available as a seat, and ADCCAC was restructured as arbitrateAD from 2024. Name the institution, the seat and the language in the clause; leaving them out produces a preliminary fight before anyone looks at the loss.

Think about enforcement at the drafting stage as well. Where the insurer's assets sit and where an award or judgment would need to be enforced should influence the clause, not be discovered afterwards during financial dispute resolution.

The rest of the compliance picture

An offshore vehicle does not sit outside the UAE's tax and reporting framework by virtue of being offshore. Corporate tax applies under Federal Decree-Law No. 47 of 2022 for financial years starting on or after 1 June 2023, at 0% up to AED 375,000 of taxable income and 9% above; whether and how it applies to a particular structure is a question of the facts, and the answer should be documented rather than assumed. VAT applies at 5% under Federal Decree-Law No. 8 of 2017 as amended by Federal Decree-Law No. 18 of 2022. Economic substance reporting was cancelled for financial years ending after 31 December 2022 by Cabinet Decision No. 98 of 2024, but obligations remain for the years from 2019 to 2022, and unfiled historic returns still surface in due diligence on a sale.

If the structure includes an onshore operating company alongside the offshore holding vehicle, that company is constituted under the Commercial Companies Law, Federal Decree-Law No. 32 of 2021, which replaced Federal Law No. 2 of 2015, and staff are employed under Federal Decree-Law No. 33 of 2021, which replaced Federal Law No. 8 of 1980. Personal data held anywhere in the structure onshore falls under Federal Decree-Law No. 45 of 2021, while the DIFC and ADGM apply their own regimes.

Before the next renewal

• Confirm which entity owns each insured asset and check that the policy schedule says so.
• Bring the register of directors, shareholders and resolutions up to date with your registered agent.
• Keep the proposal form and everything disclosed with it on a file you can retrieve.
• Read the governing law, forum and notification clauses, and change them if they do not suit the structure.

For help reviewing an insurance programme that sits over a RAK ICC structure, or for advice on where a regulated insurance activity should be licensed, contact the Nour Attorneys team.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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