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Monday, 16 April 2018

FRA to sign off on draft of Insurance Act by month’s end, expects to see it out in 2H2018

LEGISLATION WATCH- FRA to complete draft of Insurance Act by month’s end, expects to see it out in 2H2018: The Financial Regulatory Authority’s (FRA) newly-formed board of directors is expected to sign off on the amended Insurance Act by the end of April, FRA deputy head Reda Abdel Moty said yesterday, Al Mal reports. The committee drafting the bill is set to meet this week to finalize its work before passing the bill over to the board and then putting it up for “national dialogue.” The Investment Ministry and Ismail Cabinet would then revise the bill before handing it over to the House of Representatives to be issued some time in the second half of 2018, Abdel Moty said. In addition to providing incentives for insurance companies to cover SMEs, the Insurance Act is expected to give the FRA regulatory control over the sector, once it comes in effect, allowing it to govern everything from the establishing and licensing of companies, to setting industry standards and practices.

On a related note, the FRA says it has completed a draft of the regulations that will set up and govern a policyholder protection fund, according to Al Mal. The fund’s primary goal will be to protect beneficiaries against any potential insolvencies that insurance companies may face. The fund, which will be under FRA oversight, will have an independent budget and will require licensed insurance companies to pay a periodic subscription fee. The board of directors will also have authority to accept or reject any grants or contributions to the fund, as well as invest proceeds according to an annual plan.

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