Exclusive: UAE firms can pay for job loss insurance on behalf of employees

Employers in the UAE can buy the insurance against job loss on behalf of their staff, a top official has said. In an exclusive interview with Khaleej Times, Abdellatif Abuqurah, CEO, Dubai Insurance Company, said this is an optional feature.

“We are allowing the employers to buy the policy on behalf of their employees if they wish to. And I have to stress on ‘if they wish to’. The employer can buy the policy and deduct the value of the premium from their employees’ salaries, or can decide to pay it on their behalf,” Abuqurah said.

Dubai Insurance has enrolled its employees in the scheme and will be footing the costs of the premiums on their behalf, the CEO added.

Dubai Insurance Company is the representative of the insurance pool that includes nine companies to offer the Involuntary Loss of Employment (ILOE) scheme. The law went into effect at the beginning of the year. Employees will have to subscribe to one of the two plans before June 30, 2023, failing which they could be fined Dh400.

Can exempted categories sign up?

Domestic workers and employees working in the freezones are currently among the categories of employees exempted from getting the scheme.

When asked if they can subscribe to the scheme if they wish to do so, Abuqurah explained: “This is something we are working on. In consultation with the freezones, we are trying to find another similar arrangement that would be exactly the same or customised in line with their needs and requirements.”

However, as it stands now, they are exempted.

The other exempted categories are: Investors (owners of companies they work at), temporary contract workers, juveniles under the age of 18 and retirees who are entitled to a pension and joined a new job.

Can employees get better benefits for higher premiums?

One of the clauses in the unemployment insurance law states that additional benefits may be negotiated between the insured and the service provider. When asked about this, Abuqurah said they wanted to keep the door open for the “product to develop and evolve over time”.

“In the future, we will hopefully be able to design some additional coverage. I cannot give you any specific example yet, but when it comes to additional benefits, it's something that we would like to keep open as an option for employers, employees and the insurance pool.”

When asked if employees can sign up for the scheme with more than one insurance company, the official said: “The insurance pool consists of nine companies across the UAE. Basically, when you are subscribing, the risk is divided between the nine companies. So, you are actually subscribing to nine companies, and not just one.”

12-month subscription must to claim benefits

The Dubai Insurance Company CEO confirmed that employees will need to have subscribed to the scheme for 12 consecutive months in order to claim benefits.

“Even if you changed jobs in between, you would need to have a 12-month subscription period in order to be entitled to compensation,” Abuqurah said.

Why the scheme was drafted

According to Abuqurah, the scheme aims to give stability to the employment market in the UAE. “It allows people to get a decent amount of money in order to support their basic needs. It creates some sort of stability not only for the employees, but also for the employers.”

He added that the Ministry of Human Resources and Emiratisation drafted the scheme in consultation with the ILOE insurance pool.

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