The Insurers Federation of Egypt (IFE) has formed a specialised committee to study the Financial Regulatory Authority's proposals regarding insurance company governance rules.
This committee, called the Governance, Compliance, and Corporate Risk Management Committee, has proposed a number of steps it deems appropriate for insurance companies to achieve the highest levels of transparency and governance within the insurance sector, according to the IFE in its weekly bulletin issued on 25 August.
The Federation said that observing governance, risk management, and compliance (GRC) rules is not merely a regulatory requirement for the insurance industry but also a strategic necessity to ensure sustainability and growth.
Corporate governance represents establishing a clear structure of responsibilities, powers and decision-making mechanisms. The board of directors plays a pivotal role in formulating strategies, overseeing performance, and ensuring adherence to the principles of sound governance. Meanwhile, specialised committees, such as the Risk, Audit, and Compliance Committee, undertake technical oversight and ensure the effective adherence to rules.
The IFE added that having clear internal policies and procedures is crucial to achieving transparency and accountability across all operational and administrative processes.
Risk management includes identifying the various types of risks facing insurance companies, such as underwriting risks related to valuation and pricing, market risks resulting from price fluctuations, operational risks resulting from human errors or technical failures, and credit risks resulting from the inability of certain parties to fulfil their obligations. This requires assessing the likelihood of these risks occurring and their potential impact, then developing strategies to address them through reinsurance, portfolio diversification, and the implementation of strict internal controls, while ensuring continuous monitoring and control.
Regulatory compliance means that insurance companies are required to comply with local and international laws and regulations. This encompasses adherence to licensing and operating regulations, the implementation of data protection and privacy controls to maintain the confidentiality of customer information, and compliance with anti-money laundering and counter-terrorism financing measures. It also includes solvency requirements to ensure insurers’ ability to meet their obligations to policyholders.
The Federation emphasised that GRC represents an integrated framework that enables insurance companies to operate efficiently and transparently, enhancing their ability to protect customer rights, avoid systemic risks, and foster market confidence. This supports the sector's long-term stability and enhances its competitiveness regionally and internationally.