Insurance laws Egypt
Egypt's insurance sector underwent a significant transformation with the enactment of Unified Insurance Law No. 155 of 2024, effective July 11, 2024. This comprehensive legislation consolidates and updates previous laws, aiming to modernize and streamline the regulatory framework governing insurance and reinsurance activities in Egypt.
🏛️ Regulatory Authority
The Financial Regulatory Authority (FRA) is the sole body responsible for licensing, supervising, and regulating all entities engaged in insurance and reinsurance activities, as well as related services and professions The FRA's mandate includes setting governance rules, disclosure requirements, and standards for consumer protection, anti-money laundering, and combating terrorism financing Additionally, the FRA oversees digital transformation within the sector and regulates the approval of insurance policy terms and templates
📜 Key Features of the Unified Insurance Law
Consolidation of Previous Laws
The law repeals and replaces several outdated regulations, including: Private Insurance Funds Law No. 54 of 195 Insurance Regulation and Supervision Law No. 10 of 191 Compulsory Insurance Law No. 72 of 207 Relevant provisions of the Civil Code (Articles 747–77)
Categorization of Insurance Activities
he law classifies insurance activities into four main categories: Personal Insurance (e.g., life, health, retiremen) Property and Liability Insurane Medical Insurane Micro-Insurance (targeted at low-income individuals with coverage limits not exceeding EGP 200,000 annuall)
Mandatory Insurance Provisions
The FRA is empowered to define compulsory insurance types based on market needs. Potential mandatory coverages include professional liability insurance for doctors, lawyers, and accountants, as well as insurance for government assets, cyber risks, and divorce-related risks.
Private Insurance Funds
The law provides a detailed framework for establishing and operating private insurance funds, which are created by groups of individuals sharing a profession or social connection. These funds are funded through member contributions and must be registered with the FRA to gain legal status.
Takaful Insurance
The law recognizes Takaful insurance contracts, emphasizing cooperative risk-sharing among participants. This inclusion opens up opportunities for companies to establish Takaful-focused operations, catering to a growing market segment.
💰 Capital Requirement
To enhance the financial stability of the insurance sector, the FRA has set new minimum capital requirements for insurance companis:
*Life and Property Insurance Companies: EGP 600 million, to be achieved in two phases: EGP 400 million within one year, and EGP 600 million by the end of the second yer.
*Micro-Insurance Companies: EGP 40 millin.
*Specialized Health Insurers: EGP 75 millin.
*Reinsurance Companies: EGP 1 billin.
**Property and Liability Insurers in High-Risk Sectors (e.g., petroleum, aviation, energy)*: EGP 400 million initially, increasing by EGP 50 million for each additional branch, up to EGP 600 million within two yeas.
Companies must submit a detailed capital increase plan to the FRA within one month of the decree's effective date and are prohibited from distributing dividends until the minimum capital requirements are mt.
⚖️ Compliance and Enforcemen
The law introduces a range of penalties for violations, including fines ranging from EGP 1,000 to EGP 20 million, with the possibility of higher fines if the financial benefit from the violation exceeds these amouns In certain cases, imprisonment may also be imposd Additionally, the court may prohibit individuals from engaging in insurance or reinsurance activities for up to three yeas The FRA is authorized to establish Appeals Committees to handle disputes arising from administrative decisions, with decisions required within 30 days of receiving all relevant documens.
🧭 Implementation Timeline
Entities affected by the new law have a one-year compliance period from its enactment date (July 11, 2024), with the FRA having the discretion to extend this period by up to three yer.This grace period allows businesses to adjust their operations accordinly.
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The enactment of the Unified Insurance Law represents a significant step towards modernizing Egypt's insurance sector, enhancing transparency, and fostering greater financial incluso. By consolidating existing regulations and introducing new provisions, the law aims to create a more robust and competitive insurance maret.
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