Egypt: Lawmakers ask for study on insurers' capital requirements
Source: Middle East Insurance Review | Aug 2022
The House of Representatives has asked for a study to be conducted on capital requirements for establishing insurance companies and comparing them with standards in other markets, according to the Financial Regulatory Authority (FRA) assistant chairman Hesham Ramadan.
He said that lawmakers would take the findings of the study into consideration when examining the proposed new insurance law, reported Amwal Al-Ghad. Mr Ramadan also said that the first reading of the draft unified insurance law had been completed in the Economic Committee of the House of Representatives. The second reading of the draft law is currently in progress, in preparation for presenting it to the plenary session of the House of Representatives in accordance with the legislative agenda.
The current proposal is to increase the required minimum capital of life and property insurance companies from EGP150m ($8m) to EGP250m. If a P&C insurer were to offer coverage for the aviation or oil & gas sectors, the minimum capital would be required to be EGP50m more for each branch. Thus, for insurers offering aviation as well as oil & gas coverage, the required minimum capital would be EGP350m.
Mr Ramadan said that raising the required minimum capital of insurance companies is part of the FRA’s strategy to strengthen financial solvency in the insurance sector.
The Egyptian cabinet approved the draft unified insurance law last November. Among other provisions, the draft stipulates that the FRA exclusively has the authority to license and oversee the insurance sector. The draft law also covers developments that are new in Egypt such as takaful, microinsurance, digitalisation and online insurance operations. M