The Financial Regulatory Authority (FRA) has laid down rules for the use of fintech by non-bank financial institutions, including digital insurers, according to FRA assistant chairman Hesham Ramadan.
Mr Ramadan said the FRA has recently issued regulations relating to the incorporation and licensing of fintech and InsurTech companies, according to a report by Amwal Alghad.
The authority is working to prepare and issue a digital identity and online know-your-customer measures for these companies. These controls will include determining how to identify the customer electronically, whether through an electronic signature or a variable password, said Mr Ramadan. The matter will be decided on in cooperation with the Ministry of Justice.
He pointed out that the law passed in February 2022, regulating and developing the use of fintech in non-banking financial activities, allows the FRA to license digital non-bank financial companies, including online insurers.
The unified insurance law, now before parliament, when passed, will be the main piece of legislation covering digital insurance companies, he added. Executive regulations are being finalised to support the legislation.
He noted that developing fintech and InsurTech will require a digital transformation of the operations of the FRA itself in order for it to monitor and supervise insurance companies digitally.
2022-2026 strategy for insurance sector
FRA chairman Mohamed Omran had earlier outlined the authority’s strategy for the 2022-2026 period. In addition to introducing regulations for online insurance business, other important initiatives that the FRA would undertake in order to achieve its 2026 goals include:
- Continuing to promote takaful and microinsurance
- Encouraging government agencies to insure state-owned assets and to apply risk management measures and standards
- Cooperating with the relevant authorities to obtain some tax or fiscal incentives for private insurance funds to enhance their role as savings tools as well as that of being one of the main investors in the stock market
- Working with the Egyptian Credit Bureau to design a system for insurers to carry out inquiries about customers, and to create insurance products for consumer finance in cooperation with the Insurance Federation of Egypt.
The FRA also aims to double the insurance sector’s annual premium income to EGP100bn ($5.4bn) by 2026, compared to EGP47.5bn in 2021. M