The Financial Regulatory Authority (FRA) has held a consultative meeting with the managing directors of Egyptian insurance companies and executives responsible for reinsurance, to discuss the regulatory standards for reinsurance.
Dr Islam Azzam, FRA Chairman, reviewed the standards that the Authority is studying in regulating reinsurance operations, to ensure that companies adopt integrated reinsurance policies covering their ability to bear risks, levels of diversification of insurance portfolios, limits of risk concentration and assignment, target markets for reinsurance, in addition to assessing their ability to bear credit risks, reported Al Mal News.
The meeting also discussed a number of regulatory proposals, including obligating insurers to obtain the approval of their boards of directors for reinsurance policies, and to notify the FRA of them or any amendments to them, as well as to periodically verify the efficiency of the application of those policies and review them continuously.
The discussions covered requiring companies to put in place clear mechanisms for assessing and managing reinsurance risks, including periodic monitoring and analysis, and conducting stress tests and potential scenarios to measure the impact of risks on capital requirements, enabling companies to deal early with potential challenges.
Dr Azzam pointed out that financial oversight aims to align reinsurance coverage with risk management plans of insurance companies and contributes to enhancing governance levels and financial stability, supporting the ability of insurers to meet their obligations to customers and market participants.