Egyptian President Abdel-Fattah el-Sissi has ratified the Unified Insurance Law which has also been published in the Official Gazette that was issued on 10 July 2024.
The provisions of this law (Law No. 155 of 2024 ) apply to insurance and reinsurance activities and related insurance services, professions, and activities. Under the new law, the Financial Regulatory Authority (FRA) has the authority to establish, license, and supervise the entities responsible for insurance and reinsurance activities, and related services, professions, and activities.
The highlights of the much-awaited Unified Insurance Law include:
Life, non-life and reinsurance companies
The required minimum capital for insurance companies, both life and property, is increased to EGP250m from EGP60m previously.
According to the law, the FRA board of directors determines the minimum issued and fully paid-up capital at no less than EGP250m in cash, or its equivalent in free foreign currencies accepted by the Central Bank of Egypt, for life insurance companies.
The minimum capital of property and liability insurance companies is set at EGP250m in cash, or the equivalent in free foreign currencies accepted by the Central Bank of Egypt for property and liability insurance companies, provided that the capital is increased by EGP50m if an insurer engages in oil & gas, aviation, or energy insurance. (Thus, if insurance services in all of these three branches are offered by an insurer, the minimum capital would be EGP400m.)
The law sets EGP1bn as the minimum capital for a reinsurance company.
Standalone health insurers and microinsurance companies
The required minimum capital for a standalone health insurer is EGP60m while that for a microinsurer is EGP30m.
HMOs
The law sets EGP15m as the minimum capital for health management companies. No company may engage in the activity of managing healthcare programmes unless it has obtained a licence to do so from the FRA and is listed in a register prepared for this purpose. The purpose of the company is limited to engaging in the activity of managing healthcare programmes.
While health management companies may manage self-funded healthcare programmes for institutions, organisations, or employers, with the client paying the full cost of healthcare, the health management companies may not engage in any insurance activity or bear any risk under any name or determine prior or subsequent premiums or subscriptions in their programs under any name or collect them from the client.
The new law also addresses other aspects such as takaful, compulsory branches of insurance (eg. professional liability insurance), risk-based supervision, divorce insurance, and insurance for students at different levels of education.
The legislation grants insurance companies a one-year grace period to comply with its provisions, while allowing the FRA to extend this period by a maximum of three years.
The Unified Insurance Law, deliberated upon since 2018, is aimed at keeping pace with the developments witnessed by the insurance industry locally and globally.