Egypt's insurance regulator, the Financial Regulatory Authority (FRA), has issued new regulations concerning the registration of reinsurance companies and their branches to carry out business with Egyptian insurers.
As it is part of the FRA’s plan to develop the insurance sector, the framework includes standards for dealings by reinsurance companies in the Egyptian market, according to an article on Al Mal News. This is the first such set of regulations issued by the FRA.
The Authority's Decision No. (230) of 2025 stipulates the creation of a new list of companies and branches of reinsurance companies that are allowed to deal with insurance companies operating in Egypt, so that the latter are obliged to deal only with entities that are registered and approved by the Authority. There is a grace period of one year from the date of implementation of the decision for compliance.
The new regulations are also strict, said the article, pointing out that among other things, reinsurance companies must be subject to the supervision and control of a foreign entity equivalent to the FRA, and that they have a valid credit rating of no less than 'B+' from AM Best, 'BBB' ??from Standard & Poor's or Fitch, or 'Baa' from Moody’s.
In addition, the FRA stipulates that the reinsurance companies “must not have engaged in any practices that harmed the Egyptian insurance market during the last three years”.
To be registered to conduct business with insurers in Egypt, reinsurers must meet at least two conditions. The first is that the home country’s sovereign rating is no less than 'BBB-'. A reinsurance company’s paid-up capital is no less than $75m, or its equity is no less than $125m. Retakaful operators can satisfy either one of the conditions.
Other requirements include:
- Reinsurance company branches must ensure that the parent company is already registered with the regulator.
- The parent company must provide a letter of guarantee confirming its responsibility for the branch's obligations in Egypt.
- A licence to operate from a relevant regulatory body abroad, financial reports and credit rating reports for the last three years.
- Reinsurers are to conduct a technical feasibility study of their business plan for the Egyptian market.
The FRA also stresses the need to avoid concentration in the reinsurance operations of insurers. The percentage ceded to a reinsurer should not exceed 25% of the total reinsurance portfolio in property insurance, and the percentage of operations with reinsurers in any country should not exceed 40%, in order to ensure the diversification of risks and not depend on a particular entity or country.