According to a statement, the Financial Regulatory Authority (FRA) has issued a comprehensive set of regulations governing microinsurance activities.
The move aims to strengthen financial inclusion in Egypt, expand insurance coverage to low-income groups, and support the growth of small and medium-sized enterprises.
FRA said this establishes a clear regulatory framework for microinsurance, including the precise definition of microinsurance activities, the conditions for conducting microinsurance, and the obligations of licensed insurers and licensed branches.
The decision sets out detailed rules for underwriting, marketing and claims settlement, as well as standards to ensure simplicity and clarity of insurance contracts, flexible premium collection mechanisms and prompt payment of compensation.
Under this decision, microinsurance is defined as an insurance service for individuals with limited income that provides protection against specific risks, up to maximum coverage limits determined by the FRA Board of Directors, in exchange for premiums commensurate with the nature of the risks insured.
FRA Chairman Mohamed Farid said regulating microinsurance activities through clear and precise controls is an important step towards strengthening insurance protection for the most vulnerable groups.
He said the new framework will ensure ease of use and simplicity of products, faster premium collection and compensation payments, wider insurance awareness, and enable underserved sections of society to access insurance services more efficiently, while also supporting the growth and sustainability of small and medium-sized enterprises.
This regulation specifies the insurance branches in which licensed microinsurance companies may operate. These include personal insurance and savings schemes such as life insurance, personal injury insurance and long-term medical insurance, as well as property liability insurance such as fire insurance, land, river and marine transport insurance, fishing boat insurance, vehicle supplementary insurance, engineering risk insurance, agricultural insurance, other accident, non-payment risk and short-term medical insurance, as well as other sectors approved by the authorities.
The decision also outlines detailed standards for microinsurance products, calling for simple and understandable policy wording, clear and transparent marketing materials, flexible premium payment methods, and prompt payment of compensation.
It emphasizes the use of modern technology in distribution, premium collection and claim settlement, introduces simplified mechanisms for handling customer complaints, and stipulates that policyholders may not be charged premiums or fees in excess of legally mandated fees.
Regarding underwriting and claims settlement, the regulation requires insurers to adopt approved underwriting policies tailored to the characteristics of the target group, apply sound technical pricing principles to ensure fair premiums, and identify appropriate marketing and distribution channels while verifying customer data.
Claims must be resolved quickly, with a claim determination issued within five business days of document submission and compensation paid within two business days of claim approval.
FRA also identified entities authorized to sell and distribute microinsurance policies digitally.
These include licensed digital insurance brokers, banks registered with the Central Bank of Egypt (CBE), Nasser Social Bank, Egyptian Post, telecommunications companies, Agricultural Bank of Egypt, and companies, associations and non-governmental organizations licensed to carry out microfinance activities.
Insurers will be required to submit quarterly reports to FRA detailing their microinsurance activities, including the number of policies issued, premiums collected and unpaid, claims paid, fees, and types of insurance offered.
The decision also mandates the development of financial literacy initiatives and insurance awareness programs targeted at eligible groups.
Existing insurers have been given a six-month grace period to comply with the new requirements.
The decision abolishes the conflicting regulations and will take effect the day after it is published in the Official Gazette.
In mid-December, the FRA approved the establishment of Sawa Company as Egypt’s first specialized microinsurance company as part of the implementation of the Uniform Insurance Law and its enforcement regulations.
The authorities recently decided to increase the insurance coverage limit for microinsurance activities to 390,000 Egyptian pounds.
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