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Egypt: Regulator publishes new rules for supplementary motor insurance branch

Source: Middle East Insurance Review | Feb 2023

The Financial Regulatory Authority (FRA) has issued new rules relating to claims settlement in the supplementary auto insurance branch.
 
The rules, which were published in the Official Gazette on 5 January, stipulate several provisions including:
  1. A vehicle may not be considered a total loss unless the cost of repairing it exceeds 50% of the amount insured for the vehicle.

This came to light because the FRA had found that some insurance companies considered a vehicle a total loss in cases where the repair cost was less than 50% of the value of the insured amount, which was contrary to the insurance norms and stable technical foundations in force in the Egyptian market. This practice increased the number of customer complaints submitted to the FRA, which called for the need for regulatory intervention.

  1. The obligation of the insurance company, in the event of a dispute between it and the insured (the customer) over the compensation claim, is to estimate the market value of the vehicle in question, at the expense of the insurance company, with the help of more than one inspection and damage assessment expert.
  2. When a customer desires to transfer the insurance of their insured car to another insurance company, the first insurance company must submit to the second insurer, to which the insurance policy is transferred, a detailed statement of the customer’s loss rate approved by the first company.
 
Insurance companies licensed to offer supplementary vehicle insurance are obligated to amend the forms of supplementary car insurance policies issued by them in accordance with the new rules within six months of the date of issuance of the rules.
 
FRA chairman Mohamed Farid said that the new rules aim to provide more protection to policyholders. They were issued after conducting consultations with all relevant parties, including the Insurance Federation of Egypt. M 
 
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