Egyptian Parliament Approves Articles of Draft Unified Insurance Law

The Egyptian Parliament has approved a new Unified Insurance Law after three days of debates. The law aims to streamline insurance regulations in line with international standards and promote digitization and the use of financial technology in the insurance sector.

The new legislation establishes the parameters of the insurance net, making insurance mandatory in 21 cases. It also widens obligatory insurance to reach people on limited incomes. Additionally, the law introduces insurance against natural disasters for the first time in Egypt.

Under the approved articles, the Financial Regulatory Authority (FRA) will be allowed to license foreign insurance and reinsurance companies to operate in the Egyptian market. The law also increases the minimum paid-up capital requirements for insurance and reinsurance companies.

Why this matters: The new Unified Insurance Law is intended to provide effective supervision of the thriving insurance market in Egypt, which includes 41 companies collecting LE47.5 billion in annual insurance installments and 692 insurance funds collecting LE10.5 billion. The legislation aims to modernize the sector and expand insurance coverage to more citizens.

The approval of the draft law articles comes as Egypt faces ongoing economic challenges following the COVID-19 pandemic, including inflationary pressures and the need to improve living standards. The country has recently undertaken reforms, such as a significant interest rate hike and pledging to unshackle its currency, leading to an improved economic outlook from S&P Global Ratings.

The Egyptian insurance market has witnessed steady growth in recent years. The new Unified Insurance Law is expected to further regulate and develop the sector, bringing it in line with international standards and leveraging digital technologies. By expanding mandatory insurance coverage and introducing protection against natural disasters, the legislation aims to provide a stronger safety net for Egyptian citizens, especially those with limited incomes.

Key Takeaways

• Egypt approves new Unified Insurance Law to streamline regulations.
• Law makes insurance mandatory in 21 cases, expands coverage to low-income.
• Allows FRA to license foreign insurers, increases capital requirements.
• Aims to modernize insurance sector and expand coverage for citizens.
• Law comes amid Egypt's economic challenges and reforms post-COVID-19.