Egypt's Financial Regulatory Authority (FRA) has issued on Sunday a new decree to strengthen the financial solvency of insurance companies in Egypt. Decree No. 196 of 2024 mandates increased minimum capital requirements for insurers, aligning with the Unified Insurance Law of 2024. Under the decree, insurance companies must increase their issued and paid-up capital in two phases over two years. In the first year, capital must reach 400 million Egyptian pounds. By the second year, this increases to 600 million pounds. Specialised insurers, such as those covering petroleum, aviation, or energy, face higher requirements. They must maintain a base capital of 400 million pounds in the first phase, with an additional 50 million pounds per branch. In the second year, their capital must rise to 600 million pounds, plus 50 million pounds per branch. The decree also sets minimum capital requirements for various types of insurers: 40 million pounds for microinsurance companies, 75 million pounds for single-branch firms and health insurers, and 1 billion pounds for reinsurance companies. The FRA emphasises that these measures are crucial for enhancing the sector's financial stability, enabling companies to underwrite larger risks, and invest in technology to improve service quality. The move aims to broaden insurance coverage across Egypt, particularly in underserved areas. All companies must submit a compliance timeline within one month and are prohibited from distributing profits until they meet the new requirements, unless approved by the FRA. The new decree follows the enactment of the Unified Insurance Law in July 2024, which consolidated four separate laws into a single framework. This law is a cornerstone of Egypt's efforts to modernise its insurance sector, increase financial inclusion, and leverage technology to expand access to insurance services. Attribution: Amwal Al Ghad English
