The Financial Regulatory Authority (FRA) has issued a new decision to regulate the practices of risk assessment experts and loss adjusters in the insurance sector.
Among the various requirements, the decision obliges companies and individuals engaged in these fields to obtain a professional liability insurance policy as a basic condition for registration and practising in the Egyptian market.
The regulation stipulates a minimum insurance coverage of EGP5m ($94,300) for companies assessing risks, inspecting and estimating damages upon registration, and EGP100,000 for individuals, provided that the value of the policy is recalculated upon renewal according to the average income and actual business volume of the companies or individuals, reflecting the level of risks associated with their practice.
The objective of the new rules is to ensure coverage against potential professional errors and reduce disputes resulting from technical assessments.
According to the decision, no natural or legal person may engage in the activity of risk assessment or damage inspection and estimation unless they are licensed and registered with the FRA.
For companies engaged in risk assessment of loss adjusting, shareholders and board members must have appropriate experience in financial or insurance activities. The company has to appoint an executive director registered in the experts register with the Authority, and submit a feasibility study and a five-year business plan that includes the use of financial technology.
Individuals are required to have the necessary qualifications as well as practical experience of no less than five years in the field of insurance. They have to pass tests and training programmes approved by the FRA and have a good reputation. Each individual is to practise in not more than two insurance branches.