Part 3: Legal Entities, Professions, and Activities Defining the Insurance Sector
I. Insurance Pools
Insurance companies subject to the provisions of the law no. 155 of 2024 (the “Law”) may establish one (1) or more insurance pools to manage a specific risk or operation in accordance with the statutes of each pool.
A. Conditions for Establishment and Policies Issuance
The formation of an insurance pool is permitted if any of the following risks occur:
Insurance pools have the right to issue insurance policies that cover the aforementioned risks, which shall be subject to the same regulations applicable to insurance companies.
B. Establishment and Governance
The founding members of an insurance pool shall decide its statutes subject to FRA BoD’s approval.
Moreover, the insurance pool is registered in a special register within the FRA upon payment of fees consisting of EGP 100,000 (one hundred thousand Egyptian Pounds) and acquires legal personality from the date of publishing the registration decision in the Official Gazette.
II. Government Insurance Funds
Government insurance funds (the “Public Funds”) are private legal entities established by a Prime Minister Decree, upon the proposal of the FRA BoD. Accordingly, the Public Fund shall be registered in a designated register at the FRA upon payment of fees not exceeding EGP 50,000 (fifty thousand Egyptian Pounds). The terms and conditions, as well as the pricing of the insurance operations referred to in this section, are determined by the FRA BoD's decision.
A. Scope of Coverage of Compensations of High-Speed Vehicle Accidents by the Public Fund
The Government Fund for Compensation of High-Speed Vehicle Accidents (the “Fund”) provides coverage for damages arising from accidents in specific listed cases. In this regard, the Law outlines the claim process and funding for the Fund, which specifically regulates the claim submission and processing.
III. The Activities of Insurance Private Fund (the “Private Funds”) (Chapter Six)
The provisions of this chapter govern Private Funds which are already registered within the FRA, and those with resources of EGP 100,000 (one hundred thousand Egyptian Pounds) or more, provided they have at least one hundred (100) members. New Private Funds must register with the designated registery within the FRA upon their establishment. The operating systems of these Private Funds are categorised as follows:
(1) The defined benefits system.
(2) The defined contributions system.
(3) The mixed system.
A. Registration of Funds and Amendment of Their Status
The Law outlines the procedures for registering the Private Funds within the FRA, including the application process, required documents, issuance of the decision, payment of fees, and the commencement of activities upon registration.
B. Financial Resources of the Funds
The Law precisely defines the financial resources of the Private Funds, including their resources, rules for allocating their assets, regulations and ratios for investment and valuation, and annual financial statements in accordance with the Egyptian Accounting Standards issued by the FRA. Additionally, the Law provides a list of benefits enjoyed by the registered Private Funds, including exemptions from:
C. Supervision and Control
The Law stipulates that the FRA oversees and monitors Private Funds, outlining the measures and prerogatives that may be undertaken in cases of violations or serious indications of rights loss or legal breaches.
D. Fund Merger, Rights Transfer, Liquidation, and Deregistration
The Law provides a list of cases where the FRA may authorise the merger of a Private Fund into another, as well as the transfer of rights and obligations of members to another fund. It also lists the circumstances under which FRA may issue a decision to liquidate the Private Fund or deregister it.
IV. Activities of the Insurance Union and Other Insurance Professions’ Union
The Law organises the Insurance Companies Union (the “Union”) defining it as a non-profit entity composed of insurance and reinsurance companies subject to the Law, with independent legal personality and registered within the FRA. Accordingly, The Law specifies its aims and objectives, including:
Additionally, the Law provides special provisions for other insurance professions and activities unions, as well as supporting bodies and representative offices of insurance or reinsurance establishments or related activities and specifying their respective purposes.
V. Insurance Professions
The Law, in Chapter Eight, provides specific provisions for insurance professions, which include:
A. Insurance-Related Experts
The Law stipulates that professional insurance-related experts in each category, i.e. actuarial experts, insurance consultants, and risk assessment experts, must obtain a license from the FRA and be registered in the appropriate register before practicing their activity. The Law outlines the following for each expert category:
B. Insurance and Reinsurance Brokers
The Law allows natural persons to engage in insurance brokerage activities and legal persons to engage in reinsurance brokerage, provided they are registered with the FRA. It specifies a renewable registration period of five (5) years, along with the conditions, procedures, and fees for registration and renewal as determined by the FRA BoD’s. The Law also permits the licensing of insurance or reinsurance brokerage activities through companies established for this purpose, which must also be registered with the FRA. It outlines the registration requirements, including company capital, registration procedures, management personnel, and company purpose, among others.
The Law sets the registration and renewal fee at an amount to be determined by the FRA BoD’s, but not exceeding EGP 50,000 (fifty thousand Egyptian Pounds).
Finally, the Law specifies conditions for the suspension or cancellation of registration and outlines specific requirements and procedures regarding the acceptance of insurance and reinsurance operations by insurance and reinsurance companies from local or foreign reinsurance brokers.
