News Coronavirus watch15 Mar 2021

Egypt:Regulator establishes rules for profit distribution by insurers

| 15 Mar 2021

The Financial Regulatory Authority has set out rules for the distribution of dividends to shareholders of insurance companies as a measure to manage risks in the event of the continuation of the COVID-19 pandemic this year.

Mr Reda Abdel Moaty, vice chairman of the Financial Regulatory Authority, said in a statement that in light of the current exceptional circumstances resulting from the repercussions of the COVID-19 pandemic, the Authority has decided to set controls to postpone the distribution of shareholders' profits in varying proportions according to the technical reserves, financial solvency and other indicators of each insurance company.

According to a report by Amwal Alghad, he pointed out that these controls are related to the profits attributable to shareholders for the last fiscal year and are not linked to any employee distributions. He said that insurers had been approached to observe these rules when holding general assemblies for the last fiscal year.

He said that the pandemic affected economic activities negatively, domestically and globally, a situation that requires regulatory authorities in all jurisdictions to set controls for the distribution of profits.

Shareholders' equity in insurance companies reached EGP33.4bn ($2.1bn) at 30 June 2020, 4.3% lower than the EGP34.9bn reported as of 30 June 2019.

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