Egypt's senate gives final approval for new insurance law
Newspaper Title: https://english.ahram.org.eg/
Newspaper Number:
Monday - 11 April 2022
Following over a month of debates, Egypt's Senate approved on Monday a new government-drafted unified insurance law, which one MP described as necessary to cover a host of professions and services recently introduced into the insurance industry.
The 217-article law, which was approved by the Senate in principle on 27 February, will be referred to the House of Representatives to be finally discussed and voted there.
On Monday, the Senate approved that the paid-up capital of an insurance company should be from EGP 150 million to EGP 250 million in order to be officially licensed. The amendment was made upon a proposal submitted by Mahmoud El-Imam, a member of the Egyptian Socialist Democratic Party, and was approved by the government.
El-Imam said insurance companies should have high paid-up capital in order to meet their financial obligations, particularly at this time with high inflation rates.
The Senate also approved articles which state that the financial regulatory authority should examine a license request and give a decision on it within a period of one month, and that if a request is rejected, it should explain why.
Hany Sirri — the head of the Senate’s Financial and Economic Affairs Committee — said the draft Unified Insurance Law aims to draw up new and comprehensive rules for regulating the insurance industry and market in Egypt.
“The past four decades have practically shown that the insurance market is in pressing need for new legislative and regulatory rules,” said Sirri, adding that “technological developments and the creation of new insurance tools also require that unified insurance legislation be passed.”
Sirri said the new law is necessary to cover a host of professions and services that were recently introduced into the insurance industry.
“It seeks to cover the rights of holders of insurance policies and private insurance funds,” said Sirri, noting that “the law also aims to streamline insurance rules to go in line with new international standards and to speed up digitisation reforms and the use of fintech in the insurance sector.”
Sirri pointed out that “the law is meant to widen the scope of obligatory insurance operations in order to achieve insurance inclusiveness and reach out to poor and limited-income classes that are not currently covered by any kind of insurance, particularly health insurance.”
He explained that the new law will cover all kinds of insurance operations.
“The law will regulate insurance companies, special funds, obligatory operations such as highway accidents, and state the new supervisory rules for the insurance industry,” said Sirri, adding that “in the end, we will have a unified law that will regulate all forms of insurance in Egypt that is in line with international rules and methods and imposes stricter supervision.”
Two weeks ago, the Senate discussed articles regulating insurance funds, which cover risks not usually accepted by private sector insurance companies. It also approved article 100, which allows the Financial Regulatory Authority (FRA) to license the merge of two private insurance funds into one fund only after the approval of the general assemblies of the two funds.
Sirri pointed out that “the law is meant to widen the scope of obligatory insurance operations in order to achieve insurance inclusiveness and reach out to poor and limited-income classes that are not currently covered by any kind of insurance, particularly health insurance.”
He explained that the new law will cover all kinds of insurance operations.
"The law will regulate insurance companies, special funds, obligatory operations, such as highway accidents, and state the new supervisory rules for the insurance industry," said Sirri, adding that "at the end we will have a unified law that will regulate all forms of insurance in Egypt that is in line with international rules and methods and imposes stricter supervision."
Deputy Senate Speaker Bahaaeddin Abu Shoka said the law is in line with Article 28 which states that the state shall do its best to create an investment-friendly climate and pay special attention to small, medium and micro-size enterprises in all fields.
"In this respect, the law makes insurance compulsory for small-scale enterprises to encourage them to gain more ground in Egypt's economy," said Abu Shoka, adding that "the law is in line with Article 221 which states that the Egyptian Financial Regulatory Authority shall be responsible for monitoring and supervising non-banking markets and instruments, including capital markets, and insurance activities."
Phoebe Fawzi, another deputy Senate speaker, said the law targets unifying all laws governing the insurance sector into one law.
"This explains why the law is on unified insurance, not to mention that it is meant to go in line with international standards and technological developments in the insurance sector in order to attract more investments to Egypt in this field," said Fawzi.
