Egypt’s Financial Regulatory Authority (FRA, and previously known as the Egyptian Financial Supervisory Authority) has finalised its comprehensive strategy for the insurance market, in order to increase opportunities, generate business and growth, as well as regulate the market.
Mr Reda Abdel Moaty, FRA Vice Chairman, said that the Authority is adopting a growth strategy. To push this, the Authority will undertake comprehensive legislative reform, instead of merely amending existing laws and activating current legislation until the new insurance law is issued.
The growth strategy includes expanding the scope of insurance to cover areas like sports and terrorism, he said in a interview with Al Mal News.
Policyholder protection fund
Mr Moaty said that a Fund for the Protection of Policyholders will be set up. A proposal on this will be submitted to the Council of Ministers. The government’s approval of the Fund is expected in March.
He added that the Authority is currently studying how to finance the Fund, and considering the role of the Insurance Federation of Egypt (IFE) in the Fund. Contributions to the Fund could be from insurers or policyholders or both.
Services to insurers to be more efficient
Mr Moaty also said that the FRA is currently working on developing deadlines for the services it renders to the insurance market, such as product approval, complaint handling and licence issuance. This is to expedite the services rendered by the FRA.
He added that the Authority is currently working to set up an online platform to receive reports and notifications electronically from insurers. The data submitted can form the basis for a market information bank.
Also, the FRA is working with the Ministry of Justice to set up special courts and arbitration centres to handle insurance disputes.
More classes of insurance to be mandatory
FRA’s strategy involves expansion of mandatory insurance, especially liability insurance, to those who need licences to practise a profession, such as doctors, engineers and lawyers.
He said that the Authority has already applied this requirement to accountants, auditors and experts in the sectors under its control, including insurance, the money market and mortgage finance.
For example, the FRA requires insurance brokers, whether natural or legal persons, to have professional liability insurance when they seek to obtain or renew a licence.
In addition, the Cabinet has finalised a draft law on compulsory insurance for Egyptians working abroad. The coverage to be provided by the proposed law includes total or partial disability, death and the repatriation of the worker’s body in the event of death. The government is currently considering the mechanism to collect premiums on this compulsory insurance, he said. The mechanisms could include collecting premiums when issuing a passport or on each outbound trip. The collection mechanism has not been finalised as yet. The total number of Egyptians working abroad is estimated at up to 13 million.
Mr Moaty also revealed that there is a proposal to provide coverage for students from the time they enter elementary school till when they graduate from university. FRA will do this in coordination with the Ministries of Education and Higher Education. There are about 24 million students in Egypt.
Sports and terrorism
He said that a committee has been formed by representatives of the IFE to recommend coverage for sports activities. Terms will differ according to the nature of the sports or sports facilities to be insured. The requirement for coverage will be coordinated with the Ministry of Youth and Sports, and will be activated according to the sports law.
Separately, Mr Moaty is chairing a committee to study terrorism insurance with representatives from the IFE. Various proposals will be drawn up and the Ministries of Defence and Interior will be consulted. M
EGP1 = US$0.06