Mohammed Omran, chairperson of the Egyptian Financial Supervisory Authority, said that the prime minister’s decision No 1581 of 2019, issued at the end of last week – the formation of the first board of the “Insurance Fund for policyholders and beneficiaries of insurance companies”- is the final executive action to activate the fund and begin to exercise its activity in protecting the rights of policyholders in cases of insurance companies failure or of their inability to meet their obligations.
He added that the fund represents a mechanism to improve the performance of the insurance industry in Egypt and one of the internationally recognised mechanisms in protecting the rights of policyholders, as it has an effective role in ensuring the stability of the insurance market and increasing the confidence of customers in insurance companies.
Omran said that this month will witness the first meeting of the fund’s board of directors. It is composed of representatives of insurance customers, experienced members, representatives of life insurance companies, and property insurance companies.
The priorities of its agenda are to complete the operational requirements of selecting the fund’s headquarters, setting up its organisational structure, and to envisage the fund’s resources from the liabilities of insurance companies – whether membership fees or annual contributions – to the fund and the policies necessary to manage its funds.
He noted that with the first meeting of the board of directors of the insurance fund, a long-awaited step has been achieved after a wait of 37 years in activating Article 43 of the Insurance Supervision and Control Law No 10 of the year 1981. This necessitated the establishment of this fund to strengthen the insurance industry against the risk of default of one of its companies, increasing the confidence of dealers in insurance companies, and the consequent positive impact toward raising the credit rating of the insurance industry in Egypt.
In addition, it adds up to the achievements of the watchdog on the non-banking financial sector, several key strategic objectives have been achieved, including strengthening the legislative framework for activities under the supervision of the Egyptian Financial Supervisory Authority, including the insurance activity, as well as achieving better management of risks related to the safety and stability of non-bank financial markets.
Omran said that the fund is subject to the supervision and control of the Egyptian Financial Supervisory Authority without any interference in its management, which will be carried out by the parties of the insurance industry in accordance with the approved regulations of the fund.