الهيئة العامة للرقابة المالية

• Life and property insurance companies must meet 600 million Egyptian pound minimum capital requirement within two years
• FRA’s decree aims at increasing insurers’ risk-bearing capacity to broaden insurance coverage and achieve insurance penetration
• Companies must submit a detailed capital increase plan to the Authority within a month
• Minimum capital requirements are set at EGP 40 million for micro-insurance companies, EGP 75 million for specialized health insurers and 1 billion for reinsurers

FRA’s Board of Directors issued Decree No. 196 of 2024, determining the minimum capital requirements for insurers, in implementation of the Unified Insurance Law issued in July 2024. Insurance companies shall increase their capital to 400 million Egyptian pounds within a year and then to 600 million by the end of the second year from the effective date of the decree, as per the new regulations issued by the Authority.

The decree further stipulates that Property and liability insurers operating in high-risk sectors like petroleum, aviation, and energy must hold a minimum capital of 400 million Egyptian pounds, increasing by 50 million for each additional branch. Within two years, this will rise to 600 million, with additional increases for new branches. Other insurers must comply with the following minimum capital requirements: EGP 40 million for micro-insurance, EGP 75 million for specialized insurance, and 1 billion for reinsurance.

The increased capital requirements are crucial for enhancing capital adequacy of insurance companies, enabling them to underwrite larger risks supported by a robust capital base. This contributes to strengthening the financial stability of the insurance sector and supports efforts to increase insurance penetration. Moreover, the decree empowers companies to adopt advanced software and information systems, thereby improving service quality and fulfilling their obligations towards policyholders. The decree also sets minimum capital requirements for companies engaged in insurance-related activities, including 20 million Egyptian pounds for health insurance program management companies, 5 million Egyptian pounds for insurance and reinsurance firms, and 3 million Egyptian pounds for loss adjusters and risk assessors as well as actuarial and consulting firms.

Moreover, the decree stipulates that the capital of all companies subject to this decree must be fully paid in Egyptian pounds or its equivalent in freely convertible foreign currencies accepted by the Central Bank of Egypt. Also, the decree requires all companies to prepare and submit a detailed timeline outlining the stages of their capital increase to the Authority within one month of the decree’s effective date. Additionally, these companies are prohibited from distributing any cash dividends to their shareholders until they have met the minimum capital requirements and obtained prior approval from the Authority.

The decree aligns with the Authority’s mandate to supervise and regulate non-bank financial markets, particularly by issuing rules and regulations to enhance the capabilities of the insurance sector and increase its contribution to the national economy. In compliance with the Unified Insurance Law issued in July, which grants the Authority’s Board the power to set rules, regulations and procedures governing the sector, this decree aims to expand insurance coverage to a wider segment of people . The Unified Insurance Law, being the first unified law for the sector, which was previously regulated by four separate laws, represents a significant step towards regulating and digitizing financial transactions and promoting the use of financial technology to expand insurance coverage.