Egypt: Large private insurance funds obliged to hire investment managers
Source: Middle East Insurance Review | Oct 2015
Private insurance funds in Egypt that have investments of at least EGP100 million (US$12.8 million) will have to appoint a full-time director responsible for investments, under recently revised regulations governing the sector.
Mr Sherif Samy, Chairman of the Egyptian Financial Supervisory Authority (EFSA), said in a statement that such funds could alternatively outsource their investment activities to specialised asset management companies.
EFSA has welcomed the amendments to the regulations for private insurance funds which were issued by the Investment Minister. Before this, the rules had been unchanged for 40 years since 1975.
Mr Samy also pointed out that each private insurance fund must obtain a licence for a full-time investment manager, who must have professional experience of not less than 10 years in fund management. The experience includes decision-making responsibility for investments for a period of at least two years.
He added that if the board of directors of a private insurance fund decides to outsource investment functions to an asset management company, the latter would have to meet conditions set out in the revised regulations. For example, the firm must have managed portfolios with an average value of at least EGP200 million.
Private insurance funds are schemes established in companies or associations that pay damages, financial benefits or periodic salaries to members who find themselves in need. There are more than private insurance funds in the country, with annual contributions of up to EGP5 billion and reserves of up to EGP40 billion, serving 4.5 million members.
EGP1 = US$0.13