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Wednesday, 4 December 2019

Egypt’s market regulator is putting the final touches on the draft Insurance Act

LEGISLATION WATCH- Market regulator, Justice Ministry putting the final touches on Insurance Act: The Justice Ministry is finalizing the draft of the new Insurance Act, which will grant the authority more oversight over the insurance industry, and will ship it to the House of Representatives for approval, Financial Regulatory Authority (FRA) boss Mohamed Omran said, according to the local press. According to Omran, the ministry is currently working on weaving in the proposed changes from different ministries and other relevant entities before the House discusses it. Omran did not clarify the expected timeline for the process.

Background: According to draft details which leaked earlier this year, the Insurance Act would, if passed, raise the minimum requirement for the issued and paid-in capital of life and property insurance companies by 150% to EGP 150 mn and double the ceiling for life insurance payouts to EGP 80k. The Insurance Federation of Egypt was said to have voiced concerns at the time that the capital requirements are unnecessarily high and said it would urge they be reduced. However, following several rounds of consultations later in the year, it was reported that the authority has largely kept the requirements unchanged. Reports also emerged in July that the final draft will be granting the watchdog considerable power to regulate the industry. From what we know so far, the act would grant the FRA significant new powers over licensing, business formation and board composition, and monitor bank deposits.

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