Egypt: Proposed new law bars mergers between takaful and conventional players
Source: Middle East Insurance Review | Sep 2019
Egypt’s proposed new insurance law, announced by the Financial Regulatory Authority (FRA) prohibits the merger of a takaful operator with a conventional insurance company.
The bill to amend the law stipulates that mergers are allowed between two insurance companies that engage in the same category of business.
In the event that a conventional insurance company wants to merge with a takaful operator, the conventional insurer must alter its basic operating system so that it is based on takaful principles, the bill stipulates.
FRA requires the conventional insurance company which wishes to merge with a takaful operator to submit a request to the supervisory authority to amend its constitution.
The bill also states that takaful operators have to reinsure their risk with retakaful companies. It will allow takaful operators to turn to conventional reinsurers if there is a lack of sufficient capacity in retakaful companies.
The FRA’s approval must be obtained for a takaful operator to reinsure risk with conventional reinsurers. M