ADGM FSRA Consultation Paper No. 13 of 2025: Key Enhancements for Insurance and Climate Risk Management

The ADGM Financial Services Regulatory Authority has released Consultation Paper No. 13 of 2025, outlining an extensive set of proposed enhancements to insurance regulation, climate risk governance and the long-term development of ADGM as a reinsurance centre. This follows the FSRA’s ongoing work to strengthen alignment with international standards issued by the IAIS, BCBS and IOSCO.
 
The proposals apply across Insurers including Captives, Insurance Intermediaries, Insurance Managers, Authorised Persons and Recognised Bodies.
 
1. Strengthening Alignment with IAIS Insurance Core Principles
 
The FSRA sets out targeted updates to improve consistency with the IAIS Principles. These focus particularly on reinsurance risk management and market conduct.
 
Reinsurance and Risk Transfer
 
Key proposals include:
• More detailed requirements for reinsurer selection, including financial strength, expertise and claims performance.
• Enhanced expectations for reinsurance claims reporting, monitoring and oversight.
• Clear obligations for insurers to consider reinsurer or ceding insurer insolvency within their risk management frameworks.
• Strengthened governance expectations for Insurance Special Purpose Vehicles, including collateral management, investment restrictions and confirming that investors cannot seek recourse to the ceding insurer.
 
Market Conduct
 
The FSRA also proposes enhancements to COBS to reflect international expectations for fair customer treatment. These include:
• Ensuring that business is only conducted with appropriately licensed persons.
• Stronger requirements for product design and distribution, including target market assessments, suitability considerations and product understandability.
• A specific obligation to withdraw any information that is not clear, fair or accurate, with reasonable steps taken to notify parties who relied upon it.
• Clearer rules on the distinction between giving advice and not giving advice, along with documentation requirements where advice is provided.
• Stronger expectations for identifying, preventing, managing and disclosing conflicts of interest.
These enhancements are intended to support the continued development of ADGM as a centre for more complex insurance activity.
 
2. Adoption of IFRS 17 for Insurance Contracts
 
The FSRA proposes full implementation of IFRS 17 for insurance reporting within ADGM. This will:
• Replace IFRS 4 as the applicable standard.
• Promote consistency and transparency in the accounting treatment of insurance contracts.
• Require updates to the PIN and CIB Rulebooks to align regulatory obligations with IFRS 17 principles.
This brings ADGM in line with leading international insurance jurisdictions.
 
3. Miscellaneous Enhancements Across the Framework
 
The consultation introduces several practical refinements designed to improve clarity and reduce unnecessary burden. These include:
• Clearer articulation of insurance activity restrictions, particularly regarding risks situated in other financial free zones.
• Automatic treatment of ceding insurers and insurance brokers as Market Counterparties, removing the need for classification checks in reinsurance business.
• Removal of quarterly reporting obligations for Captive Insurers unless otherwise required by the FSRA.
• Streamlining complaints handling through a single online submission channel, replacing email based reporting.
 
4. New Expectations for Climate Related Financial Risk Management
 
The FSRA proposes a proportionate and principles-based approach to the management of climate related financial risks. All Authorised Persons and Recognised Bodies will be required to:
• Assess whether climate related risks are material to their business.
• Manage any material risks in a way that reflects the nature, scale and complexity of the firm.
• Consider climate related risks as part of capital adequacy assessments.
Additional guidance will help firms determine when a climate related risk becomes material and how it can be appropriately managed within existing risk frameworks.
 
5. Establishing ADGM as a Regional Reinsurance Hub
 
The FSRA outlines its long-term intention to position ADGM as a regional centre for reinsurance and eventually home to Internationally Active Insurance Groups. A forthcoming discussion paper will set out proposals covering:
• Capital and solvency requirements
• Group supervision approaches
• Exit and resolution planning
• Public disclosure expectations
This is part of a broader multi-year programme to develop a high-quality regulatory environment for reinsurance operations.
 
Next Steps
 
The consultation remains open until 30 January 2026. Following review of industry feedback, the FSRA will finalise and implement the amendments.
 
How Clarity Can Help
 
Clarity Consulting Solutions supports firms across ADGM and DIFC with interpreting and implementing regulatory change. We work with insurers, intermediaries and broader financial institutions to provide:
• Regulatory gap analysis aligned to the proposed amendments
• Governance and operating model enhancements
• IFRS 17 readiness support
• Integration of climate related risks into risk and capital frameworks
• Conduct of business and product governance improvements
 
Our team combines deep regulatory expertise with practical insight to help firms meet expectations confidently and proportionately.
 
If you would like to discuss how these proposals may affect your business, our team is ready to assist.