الهيئة العامة للرقابة المالية

 The new conditions aim to implement best governance and transparency practices and enhance performance efficiency within the insurance sector.

• FRA has established specific conditions to ensure that insurance and reinsurance companies are managed by highly qualified personnel.
• The new board membership conditions will apply to the company’s first upcoming board elections and will be immediately enforced if any new members join before elections.
• A new requirement stipulates that technical positions in each company’s organizational structure must be regularized within 18 months of the resolution’s effective date.
• Delegated board members are now required to disclose to the Authority any other board memberships they hold in other companies within one month of the resolution’s effective date.

FRA Board of Directors, chaired by Dr. Mohamed Farid, has issued Resolution No. 89 of 2025. This resolution outlines the essential conditions and criteria for board members and executive management – specifically those responsible for technical functions – within insurance and reinsurance companies.

This initiative underscores FRA’s dedication to implement best practices in governance and transparency, enhance performance efficiency, and ensure highly qualified individuals lead these vital companies. Ultimately, this move aims to bolster the stability and growth of Egypt’s insurance sector.

The resolution’s provisions apply broadly to all board members, executive management responsible for technical functions and any other relevant parties subject to these same standards.

To be eligible for a board position at any insurance or reinsurance company, a candidate must meet several key requirements. They need to demonstrate good conduct and reputation, possess full legal capacity, and enjoy all civil rights. Candidates must also hold a suitable higher qualification from an Egyptian university or an equivalent/accredited foreign institution. Furthermore, strict criteria apply regarding their past record: candidates must have no convictions for felonies or misdemeanors (especially those involving moral turpitude or dishonesty), nor for crimes under company laws, non-bank financial activity laws, or Anti-Money Laundering laws within the last five years (unless rehabilitation has occurred). They also cannot have been declared bankrupt within the last five years (unless rehabilitated). Finally, they must not have faced administrative measures against themselves or a company they managed (whether as a chairman, board member, or employee) due to serious violations stemming from dereliction of duties within the last three years, nor have been dismissed or deregistered from a profession for reasons of honor or integrity within the last three years.

The resolution outlines crucial requirements for board candidates, emphasizing independence and the avoidance of conflicts of interest that could impede their duties. This includes a clear mandate to disclose kinship up to the fourth degree with company officials, ensuring transparency.

The conditions for board membership now include a mandate for candidates to be familiar with insurance legislation and possess relevant experience specific to their nominated position. This means a minimum of 10 years of experience for the Chairman of the Board, and at least 15 years for other experienced candidates, though FRA can reduce this requirement based on their qualifications and academic certificates. For all other board members, a minimum of 5 years of experience is required in fields approved by FRA, with a strong emphasis on ensuring diverse expertise within the board’s composition.

Furthermore, the resolution strictly prohibits individuals from holding board memberships in competing companies within the same field. There are narrow exceptions to this rule: it is permitted if the companies are subsidiaries or sister entities, but only with the General Assembly’s explicit approval. Alternatively, a candidate can proceed if they provide a signed undertaking to immediately resign from any excess board memberships upon successfully securing a new board seat.

The resolution additionally clarifies that an individual cannot simultaneously serve as Managing Director and hold a board membership in more than three companies where their primary company has a stake. The only exception is if they commit to resign from any excess positions. However, holding board memberships in other, non-conflicting companies is permissible, provided there is no conflict of interest and prior approval (non-objection) is secured from the Authority.

Moreover, the resolution introduces a mandatory personal interview with FRA for both the Chairman of the Board and the Managing Director. The Authority also reserves the right to conduct interviews with other board membership candidates, with the flexibility to do so using electronic means.

These board membership conditions will apply to the company’s first upcoming board elections or will be immediately applicable if new members join. Companies are obligated to regularize the status of technical positions within their organizational structure in accordance with the resolution’s provisions, within 18 months from its effective date. Approvals granted for these positions after the issuance of the Unified Insurance Law will remain valid until their expiration. However, its renewal will require fulfilling the renewal requirements as stipulated in this resolution.

A member’s position on a company’s board of directors will be immediately terminated if they lose any of the stipulated qualifications related to good conduct and reputation, full legal capacity, enjoyment of civil rights, absence of prior convictions, avoidance of conflicts of interest, or restrictions on holding multiple positions. Should such an event occur, the company’s board of directors is mandated to take all necessary actions to address the termination.

Selection process for board members now requires companies to submit a comprehensive report to FRA 60 days before the General Assembly meeting. This report must detail the names, personal information and all relevant documents for every candidate. FRA will then review these applications to ensure all conditions are met, subsequently notifying the company of the approved candidates. Following this, the company is responsible for informing all applicants of the review’s outcome within two working days and for publishing the names of the approved candidates on its website.

Following FRA approval, companies must present the approved candidates to the General Assembly for election or appointment to the board. After the General Assembly meeting, the company is required to provide FRA with the full composition of its new board of directors within 10 working days.

In addition, the resolution establishes clear succession protocols for key leadership roles. If the Chairman’s position becomes vacant, the Managing Director will automatically assume those responsibilities. Should the Managing Director’s position become vacant, the board must nominate an experienced member or an acting officer. This nominee must successfully complete a personal interview with FRA. The company then has three months to fill the vacant Managing Director position, with possible extensions granted by the Authority for justified reasons.

The resolution stipulates that companies must provide FRA with data and documents for nominated candidates. This information will then be presented to the next General Assembly meeting for approval of the board member’s appointment. Should a board seat become vacant, excluding the positions of Chairman and Managing Director, the company’s board of directors may nominate another member in accordance with the established procedures.

Furthermore, the resolution stipulates that the administrative structure of insurance and reinsurance companies must include key officials responsible for a comprehensive range of departments. These include Underwriting, Investment, Claims, Reinsurance, Actuarial Expertise, Compliance, Internal Audit, Financial Management, Risk Management, Customer Complaints, Information Technology and Digital Transformation, Anti-Money Laundering and Counter-Terrorist Financing, Underwriting and Claims for various insurance branches, Legal Department and Human Resources.

It’s permissible to outsource certain functions to external entities. Specifically, the roles of Head of Actuarial Expertise and Head of Legal Department can be assigned to actuarial firms, individual actuarial experts or law firms. This is subject to prior approval from the Authority, based on a company’s submitted request outlining the justifications for outsourcing.

Individuals in executive management, particularly those in technical and operational roles, must now meet specific mandatory requirements. They need to demonstrate good conduct and a strong reputation, possess full legal capacity and enjoy all civil rights. A suitable higher education degree from an accredited Egyptian university or an FRA-recognized foreign equivalent is also essential. Moreover, candidates must not have any criminal convictions or misdemeanors involving moral turpitude, dishonesty, or offenses under company laws, non-bank financial activity regulations, or Anti-Money laundering laws. This also applies to a declaration of bankruptcy, with a five-year look-back period, unless legal rehabilitation has been granted.

The resolution further specifies that candidates must not have faced administrative measures against themselves or a company they managed (as a chairman, board member, or employee) due to serious violations stemming from a breach of their duties and responsibilities within the last three years.

Candidates must demonstrate independence and actively avoid any conflicts of interest that could impede their job performance. This includes the mandatory disclosure of kinship ties up to the fourth degree with company officials. Additionally, a minimum of five years of relevant experience is required for the position, and candidates cannot be employed by any entity that might compromise their duties. All individuals applying for technical roles in underwriting, investment, claims, reinsurance, actuarial expertise, compliance, internal audit, financial management, risk management, customer complaints, and information technology and digital transformation must successfully pass a personal interview.

FRA may conduct interviews for candidates nominated to head underwriting and claims for various branches, legal departments and human resources. For the Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) officer, the provisions outlined in FRA Board of Directors Resolution No. 161 of 2024 will apply.

The resolution details appointment procedures for executive management responsible for technical and operational roles. Insurance and reinsurance companies must submit candidates’ names to FRA for all key management positions, including underwriting, investment, claims, reinsurance, actuarial expertise, compliance, internal audit, financial management, risk management, customer complaints, information technology and digital transformation, Anti-Money laundering and counter-terrorist financing, underwriting and claims for various insurance branches, legal department and human resources. In addition to the candidate’s name, companies need to provide a range of documents. These include their National ID, CV, qualifications and a detailed status report that discloses any kinship ties. Candidates must also commit to join the electronic platform for professionals and submit any other data or documents FRA deems necessary.

FRA will review all candidate documents and then notify companies of its decision. Any FRA approval for these positions is valid for three years and can be renewed, provided the candidate continues to meet the job requirements. It is crucial to understand that appointments are not permitted without prior FRA approval.

Additionally, candidates who transfer to another company might be exempt from a new interview. This exemption applies only if the transfer occurs within the three-year validity period of their initial FRA approval for the position.

Also, the resolution mandates companies to fill any vacant executive management position within three months, allowing for a temporary assignment until the role is permanently filled. FRA must also be notified within 10 days of such a vacancy.

For key department heads, including those in Compliance, Internal Audit, Risk, Actuarial, and Anti-Money Laundering/Counter-Terrorist Financing, companies must secure a “no objection” from FRA before termination. Companies also need to provide the Authority with the reasons for termination. In cases of resignation, FRA requires notification within two business days and it reserves the right to interview the individual after their departure.

If executive management staff in technical or operational roles within insurance or reinsurance companies violate this resolution, related insurance laws or their implementing resolutions, or if their submitted documents for FRA approval are found to be false, the Authority can initially issue a warning or an admonition.

FRA’s Board of Directors can impose harsher measures if any of the aforementioned violations occur, with the specific action depending on the severity of the infraction. These measures can include canceling approval for the position, along with a prohibition on appointment for one year, or even canceling approval and imposing a ban on appointment for one to five years. Any decision to implement such measures may also require the individual to complete specific training courses as determined by FRA.

Delegated board members must now inform FRA of all their other board memberships. This disclosure is mandatory within one month of the resolution’s effective date.