الهيئة العامة للرقابة المالية

• Enhancing governance standards is crucial for achieving stability, effectively reducing risks and improving the overall quality of decision-making, ultimately leading to increased stakeholder trust.
• Companies are required to prepare comprehensive internal governance rules, which must include a code of ethics for the Board of Directors, its committees and related operational policies.
• Each company must assign a dedicated Governance Officer responsible for monitoring and ensuring the effective implementation of FRA’s rules.
• The new resolution explicitly permits the electronic documentation (using audi-visual recording) of both General Assemblies’ meetings and Board meetings to ensure transparency and secure digital record keeping.
• The Board of Directors must include at least five Non-Executive Members, two of whom must be Independent and the composition must ensure adequate women’s representation.
• The positions of Chairman of the Board and Managing Director/CEO are strictly prohibited from being combined.
• The Board is required to establish ten specialized committees (e.g., Audit, Risk), with key committees mandated to be chaired by an Independent Member to provide expert assistance and support.
• Companies must develop a comprehensive policy to prevent conflicts of interest that covers both Board members and employees.
• Board members are prohibited from engaging in brokerage activities for their own account and must disclose any personal interest in the company’s contracts.
• Companies must disclose within one month of the resolution’s issuance any existing situations involving conflicts of interest or kinship among Board/Senior Management and other sector companies.
• Companies are granted a one-year grace period to regularize their status and amend their Articles of Association, starting from the effective date of the resolution.
• The new conditions for the composition of the Board of Directors and its committees must be adhered to starting from the first upcoming Board elections for each company.
• Companies must notify the Authority of their detailed timeline for compliance (regularizing status) within one month of the resolution’s effective date.

FRA Board of Directors issued resolution no. 200 of 2025 including the first governance rules for insurance and re-insurance companies. The new resolution enhances the regulatory framework of insurance and re-insurance companies in Egypt, enhances transparency, integrity and accountability and protects the interest of all stakeholders.

The resolution mandates that every company must prepare a comprehensive internal governance regulation that outlines the policies, procedures and ethical standards across several key areas. This core regulation must incorporate a Code of Ethics for the Board and its committees, along with foundational procedures for internal auditing, risk management, and the succession plan. It must also provide detailed governance for all core financial and operational areas, including investment, subscription, claims settlements, reinsurance, credit operations, and the management of assets and obligations (ALM). Crucially, the regulation must enforce strict compliance and integrity standards through mandatory whistleblowing procedures, rigorous management of conflicts of interest, comprehensive disclosure and transparency policies, and the robust application of Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) protocols. The regulation must address cybersecurity, information technology and digital transformation, the protection of company assets and Environmental, Social, and Governance (ESG) Practices related to sustainability and climate change, alongside clear rules for remuneration and benefits.

The resolution further mandates that the entire regulation and its annexes must be reviewed annually and made readily accessible to shareholders, with any proposed amendments requiring reporting to the Authority. To oversee these duties, companies must appoint a dedicated Governance Officer, a role which may be merged with that of the Compliance Officer, subject to the Authority’s explicit approval.

Companies are obliged to prepare a comprehensive annual governance report, jointly signed by the Chairman of the Board and the Managing Director/CEO. This vital report must be presented to both the Board and the General Assembly, with a summary published publicly on the company’s website. Its content must provide detailed disclosures on the company’s ownership structure, the composition and performance of the Board and its committees, remuneration details, the extent of regulatory compliance (including any penalties), the performance of all supervisory departments and all dealings conducted with related parties.

Companies are mandated to provide full transparency to shareholders and must make all information and reports related to the meeting’s agenda available beforehand. To ensure broader representation of ownership interests, the resolution formally allows for cumulative voting when electing Board members.

Furthermore, the rules permit the use of electronic systems for calling meetings, presenting agenda items and facilitating remote voting. These digital processes are subject to stringent safeguards to ensure information security, vote confidentiality, identity verification, and legal quorum. The framework also requires that these systems provide shareholders with the necessary mechanisms to submit inquiries and receive timely responses.

The resolution defines “board of directors” as the ultimate governing authority. The Board is mandated to act in the company and its shareholders’ best interest by: setting the strategic vision, supervising management, enforcing effective internal policies and regulatory compliance, implementing early risk detection systems, developing training programs, safeguarding information security and ensuring transparency and accurate disclosure.

The Board of Directors shall consist of a minimum of five members. A majority of the Board members must be non-executive members, at least two of whom shall be designated as independent members. The Board must also include female representation. Furthermore, combining the roles of Chairman of the Board and Managing Director/CEO is strictly prohibited.

The resolution authorizes recording of General Assembly and Board meetings using electronic audio-visual means. The minutes of these meetings must be maintained as secure electronic records that guarantee integrity, prevent alteration or deletion and support reliable backup and retrieval.

Moreover, the company shall establish internal regulations for this process ensuring that minutes are electronically signed in accordance to Signature Law. These E-records shall implement security measures to protect information and prevent unauthorized access, in compliance with the Authority’s requirements. On the other hand, companies must provide the Authority with a copy of the General Assembly’s meeting recording upon request for approving the minutes.

The minutes of the Board of Directors meetings shall comprehensively include the names of present members and absent, the topics discussed, main deliberations, outcomes of any votes, specifying those in favor, opposed or abstaining along with the reasons, if any. This is in addition to all decisions adopted, any recorded reservations and include all documents and materials reviewed or referenced during the meeting.

The resolution mandates a complete separation between the responsibilities of the Board of Directors and those of executive management, along with the strict avoidance of conflicts of interest. Furthermore, it establishes clear criteria for a director to lose independent status, which occurs when ownership exceeds 1% of the company’s shares, the director has held a prior executive position within the company, or the director has provided consulting or professional services to the company within the preceding two years.

The governance framework clearly defines the roles, starting with the Chairman of the Board, whose responsibilities include ensuring the effectiveness and quality of the Board’s performance, drafting the Board’s Charter, overseeing meetings, calling the General Assembly and confirming the efficacy of the governance system. Crucially, the Chairman must facilitate a meeting between the Board and key control function heads – including Compliance, Risk, Internal Audit, the Actuary and the External Auditor – at least annually without the presence of executive members.

On the other hand, the Managing Director or CEO execute strategy and plans, lead day-to-day operations, ensure an independent working environment for supervisory departments, propose matters to the Board, prepare reports and enforce the code of professional conduct.

The Board must convene at least six times annually, and no member can miss more than one-third of the sessions. While meetings may utilize modern communication, methods for up to one-third of the annual total (subject to a specific quorum), all meeting minutes must be accurately and clearly recorded and stored electronically.

The resolution mandates that the Board shall establish ten specialized committees: Audit, Risk, Nominations, and Remuneration Committees each required to be chaired by an Independent Member. The other seven committees cover Investment, Governance, Policyholders’ Rights Protection, IT/Digital Transformation, Insurance Product Development, Asset and Liability Management and ESG/Sustainability/Climate Governance.

The resolution strictly governs committee formation, mandating that the Nominations and Remuneration, Internal Audit, Risk, Investment, Governance, and Policyholders’ Rights Protection Committees cannot be merged or share identical membership. All committees must maintain an odd number of members, with a minimum of three.

Furthermore, the Audit, Risk, Nominations, Governance and Policyholders’ Rights Protection Committees must be composed of non-executive and independent members, though the Investment Committee is permitted to include the Managing Director or CEO. In contrast, the IT/Digital Transformation, Product Development, Asset and Liability Management and Sustainability Committees may be formed from Board members, senior executive management, or external experts. All committees are required to meet periodically, at least once every three months, to develop recommendations and submit their reports to the main Board.

A key governance requirement is the establishment of independent departments for Internal Control, Compliance, Risk Management, Internal Audit, Governance, and Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF). The chief officers heading these departments must maintain full independence from all other operational roles. Their reporting structure emphasizes governance, requiring them to report functionally (technically) to their respective Board committees – for instance, the Chief Risk Officer reports to the Risk Committee, while the Compliance and Internal Audit officers report to the Internal Audit Committee.

These departments shall analyze and evaluate risks, ensure strict compliance with all relevant legislation, review internal systems, monitor the effective application of governance principles and actively combating financial crimes.

The Board of Directors is obligated to establish clear policies for disclosure and transparency. These policies must ensure that all financial and non-financial information, along with material events, is presented fairly, accurately, and in a timely manner to all stakeholders. The disclosed information must adhere to stringent quality standards, requiring it to be coherent, periodic, documented, comprehensive, understandable, credible, measurable and comparable. Furthermore, companies are specifically mandated to produce annual reports detailing their operations and their Environmental, Social, and Governance (ESG) practices related to sustainability and climate governance.

A core component of the governance structure is a comprehensive policy to prevent conflicts of interest among all Board members and employees. This policy imposes particularly strict restrictions on the Managing Director or CEO. Specifically, the CEO cannot concurrently hold any other executive role within the company, nor can they hold a membership or executive function in any other entity involved in professions or activities related to insurance. Finally, they are prohibited from accepting insurance brokerage services, either personally or on behalf of any relatives up to the second degree.

The new resolution prohibits them from engaging in brokerage activities for their own account and strictly mandates that they disclose any personal interest in the company’s contracts. In such cases, they must obtain prior approval from the General Assembly and abstain from voting. Furthermore, a Board member may not compete with the company’s business unless they receive explicit approval from the General Assembly.

The policy extends specific limitations to company employees, prohibiting them from holding their current role concurrently with any executive position in another insurance company or a firm involved in insurance-related professions. Furthermore, to prevent conflicts of interest, employees are forbidden from accepting insurance brokerage for themselves or their relatives up to the fourth degree. Like Board members, all employees are also required to disclose any personal interest they have in the company’s contracts.

Moreover, companies must notify the Authority within one month of the resolution’s effective date of any existing conflicts of interest or relationships of kinship or affinity among Board members, senior executive management and other sector companies.

These comprehensive governance rules apply to all insurance and reinsurance companies stipulated under the Unified Insurance Law.  Companies must regularize their status and amend their articles of association to align with the resolution’s provisions within a transition period of one year from its effective date, a deadline that the Authority may potentially extend.

Notably, specific requirements related to the composition and formation of the Board of Directors and its committees will be implemented starting from the next upcoming election for each company’s Board. Companies must submit to the Authority, also within one month, a detailed timeline for achieving full compliance with the new mandates and subsequently submit quarterly data on their progress.