Egypt: FRA proposes to increase insurers' equity investments to 40% of total portfolio
Source: Middle East Insurance Review | Jun 2018
The Financial Regulatory Authority (FRA) is proposing to increase the proportion of an insurance or reinsurance company’s investments in stocks and shares to 40% of the total investments of the company. The current cap is 30%.
The revision has to be approved by Dr Sahar Nasr, Minister of Investment and International Cooperation, reported Arab News.
Mr Reda Abdel Moaty, FRA’s vice chairman, reviewing the proposed change in the ceiling, told Seventh Day the practical reality is that government-owned insurers, namely, Misr Insurance and Misr Life Insurance, were constrained by the 30% limit which has been in place since 1996.
Another reason for the revision of the ceiling is that insurance entities have to comply with new Egyptian accounting standards that have fundamental amendments to the basis of recognition and measurement of assets and liabilities.
Mr Moaty noted too the many economic and accounting variables in recent times related to insurance activity and the results of these variables that affect, constrain and impose impediments to the investment performance of insurers. He said investing has become a parallel activity of insurers that is no less important than underwriting. M