الهيئة العامة للرقابة المالية

Dr. Islam Azzam – FRA Chairman:

• Developing underwriting standards protects policyholders’ rights and boosts insurers’ risk management efficiency.
• Companies are now required to report all cases of fraud immediately … three-month grace period to align with the new regulations.

Financial Regulatory Authority (FRA) has introduced mandatory credit checks for individuals applying for life insurance policies valued at EGP 10 million or above, including foreign currency equivalents. This upgrade to standard risk assessment frameworks is designed to enhance institutional decision-making and provide superior protection for policyholders.

The directive was issued under FRA Chairman Resolution No. 2036 of 2026, titled “Risk Management Standards for Underwriting Individual Life Insurance Operations.” Recently published in the official gazette (Al-Waqa’i’ al-Misriyya), the resolution grants insurers a three-month grace period to comply, effective from July 16.

The Resolution updates the risk management standards previously issued under Circular No. (8) of 2024. It further obligates companies to conduct credit checks through licensed credit bureau agencies if a client’s income, profession, or job title does not align with the sum assured or the required premium payments, as well as in cases where the legitimacy of the insurance application is suspect.

Additionally, it requires companies to verify the identity of the insurance applicant and the authenticity of the submitted documents, obtain accurate data regarding their medical and financial status and establish internal policies and systems to detect unusual patterns in insurance applications. Companies must also analyze instances of repetitive insurance coverage for the same risks to aid in the early detection of fraud or deception, thereby enhancing risk management efficiency.

The resolution further requires insurers to build systems that ensure a policy’s coverage amounts and income levels align with the company’s historical benchmarks for similar risk profiles in the insured’s geographical area. Companies must also track recurring risks and conduct comprehensive reviews to verify application legitimacy, mitigating the threat of underwriting fraud.

Dr. Islam Azzam, FRA Chairman stated that the quality of risk assessment is a fundamental pillar for the success of insurance activities. He noted that the underwriting standards set by FRA play an essential role in boosting companies’ efficiency in proactively monitoring risks and curbing fraud, which ultimately protects policyholders and ensures that insurance coverage is directed to those entitled to it based on sound technical principles.

In this context, he explained that the Resolution requires companies to immediately report any instances of fraud or deception discovered during the life insurance underwriting process. Furthermore, insurers must integrate these new standards into their mandatory underwriting policies, in line with the sector’s legislative and regulatory framework.

Dr. Islam Azzam reaffirmed the Authority’s ongoing commitment to finalizing the regulatory framework for the insurance sector, in alignment with the Unified Insurance Law No. 155 of 2024. This initiative is designed to stimulate corporate innovation, diversify product offerings and develop underwriting strategies, thereby enhancing sector’s appeal and competitiveness while driving national economic prosperity.