Egypt: Regulator clears confusion over stakes held in Islamic insurers by conventional players
Source: Middle East Insurance Review | May 2020
The Financial Regulatory Authority (FRA) has issued a resolution permitting conventional insurers to have a stake in a takaful company.
The decision (Resolution No. 53 of 2020) affirms that takaful is different from conventional insurance in its nature and in the way it is practised, reported Al Mal. This distinction is significant because under the Insurance Supervision and Control Law, “an insurance company may not contribute to the capital of another insurance company operating in Egypt”.
The resolution was passed because several foreign insurance entities are eyeing entry into the Egyptian market. For instance, Kenya Re is reportedly planning to establish a retakaful company in Egypt.
Furthermore, the resolution clears up the legal standing of insurance companies which are shareholders of existing takaful operators.
For instance, state-owned Misr Insurance Holding Company has a 12% stake in newly established Misr Takaful Life Insurance Company, while its subsidiaries Misr Insurance and Misr Life Insurance have a stake of 20% each. The other shareholders are National Bank of Egypt (24%), Banque Misr (14%), and Misr Capital Investments (10%).
In addition, the Islamic general insurer, Misr Insurance Takaful, was launched in 2017. It is owned 40% by Misr Insurance Holding, Misr Life Insurance (20%), Misr Real Estate Assets Management (20%), Holding Company for Pharmaceuticals (10%) and Misr Capital Investments (10%). M