1. Where a Licensed Financial Institution, breaches or is likely to breach its capital or liquidity requirement due to a rapidly deteriorating financial condition s, or where the concerned institution itself or one of its subsidiaries is experiencing a deficiency in its financial position, the Central Bank may, in accordance with the regulations it issues, take a series of measures, including: a. Require the concerned institution to implement one or more measures in its recovery plan. b. Require the concerned institution to provide additional financial resources for support of its paid-up capital. c. Impose additional liquidity requirements on the concerned institution, commensurable with the risks associated with its activities. d. Require the concerned institution to evaluate its situation, identify corrective measures to address risks and deficiencies, and make arrangements to adopt those measures. e. Require the concerned institution to make changes to its business strategy. f. Require the concerned institution to make changes to its legal or operational structure. g. Issue a decision and take necessary actions to merge the concerned institution with another Licensed Financial Institution. h. Permit any eligible financial institution to acquire the concerned institution. i. Remove or replace one or more members of the board of directors or other Authorized Individuals who are proven unfit to discharge their duties. j. Form an interim committee to manage the concerned institution and authorize such committee to take whatever actions it deems appropriate, as per conditions and controls determined by the Board of Directors, including the possibility of taking the decision to impose a moratorium on all or some of the activities of the concerned institution with immediate effect as well as consequential actions. The concerned institution shall be liable for the fees of the committee as determined by the Central Bank. k. Undertake, over a period specified by the Board of Directors, direct management of the concerned institution, and shall, in this case, substitute management of the concerned institution in exercising all powers, including financial and administrative powers; and the powers and authorities of its board of directors, and its general assembly shall immediately be frozen until expiry of the period of interim management. l. Appoint an independent observer member from outside the CBUAE to attend meetings of the board of directors of the concerned institution and participate in the discussions without having a vote and the Board of Directors shall determine the member’s duties and remuneration. m. Request competent authorities in the State to place the concerned institution under interim custody and seize its assets, property and shareholders rights. n. Issue a resolution to liquidate the concerned institution, prepare a plan for liquidation or transfer of its assets and liabilities, as it deems appropriate, along with all related settlements and releases and implement or oversee implementation of the liquidation plan, or adopt a resolution decision, or request the competent court to declare bankruptcy, in accordance with the legislations in force in the State. o. Any other measures or actions in accordance with a decision by the Board of Directors. 2. In respect of a (Re)Insurance Company failing to take certain measures or actions to rectify its position within the determined period, the Central Bank may, at its own discretion and in addition to the measures referred to in item (1) of this article, take one or more of the following measures to redress its situation, including: a. Suspend or prevent the concerned company from concluding any more insurance contracts or practicing any or all types of insurance. b. Set upper limits for the Premiums total amounts received by the concerned company for issuing insurance policies. c. Retain assets in the State equal in value to the concerned company’s total net obligations accrued from its operations in the State or a certain percentage of their value. d. Restrict the concerned company’s involvement in any of its investment activities associated with the Solvency Margin or compelling it to liquidate its investments in any of these activities to serve this purpose, unless such action would cause damage to such company as determined by the expert specialized in this field. e. Require the concerned company to refrain from making distributions on own fund instruments or repayment or repurchase of own fund items. f. Suspend or revoke the concerned company’s license. g. Restructure the concerned company. h. Liquidate the concerned company. 3. The provisions stipulated in items nos. (1) and (2) of this article shall apply to Insurance-Related Professions to the extent appropriate to the nature of their professions. 4. Where a decision is issued to merge or liquidate a Licensed Financial Institution incorporated outside the State or in a Financial Free Zone, with a branch and subsidiary in the State, the same procedures in force in the jurisdictions concerned with the institution shall be applied, unless this results in a negative impact on financial stability, provides better protection for creditors in the State, and unless otherwise agreed upon with the concerned authority. 5. The Central Bank may coordinate with the relevant federal and local authorities, or any other authority before issuance of any decision by the Board of Directors, as per provisions of this article. The Central Bank may request the competent judicial authorities to take protective and urgent measures and actions, which would ensure protection of property and interest of investors, depositors, Insured, and Beneficiaries or serve public interest. 6. The concerned Licensed Financial Institution shall be notified, officially, of the Central Bank’s decision pertaining to this article within a period not exceeding twenty (20) working days from date of its issue. The notice shall include the following information: a. Content of the decision. b. Reasons for the decision. c. Effective date of the decision. d. A statement advising the concerned Licensed Financial Institution of its right to submit a grievance against the decision, within a period not exceeding twenty (20) working days from the date of notification, by applying to the Grievances and Appeals Committee, in accordance with the provisions of this decree-law.
Interpretation and application must be checked against the official text and current version.