Egypt: Microinsurance regulations introduced
Source: Middle East Insurance Review | Dec 2016
The Egyptian Financial Supervisory Authority (EFSA) has issued for the first time regulations governing microinsurance. It also set the rules that govern the issuance and distribution of electronic policies.
The move marks an important step to extend insurance services to new segments of society and improving financial inclusion in Egypt.
Mr Sherif Samy, EFSA Chairman, said in a statement that the regulations define microinsurance as any insurance service targeting low-income persons in order to protect them against risks by their paying a premium commensurate with the nature of the insured risk in allowed business lines, provided the value of the insurance contract does not exceed EGP100,000 (US$6,239).
He said that following consultations with international experts and the Insurance Federation of Egypt, microinsurance cover would be available for accidents, long-term medical and life insurance, as well as property insurance namely petrol, car, aviation, marine hull & machinery (except fishing boats) and transportation insurance and its liabilities.
He said that it is important that microinsurance policies be simple and do not contain terms that are difficult to understand. It is also necessary to have a wide network for distribution, premium collection and payment of compensation, and be close to those with limited incomes. He explained that for these reasons EFSA approved an online system for microinsurance.
He said that those working in microfinance and civic organisations are expected to play an important role in the distribution of microinsurance due to their presence throughout Egypt and their client base.
EGP1 = US$0.06