• Insurance authorities in Egypt have always been controlled by precise
legal regulations. Law no. 92/1939, which was issued after the foreign
concessions were canceled, is considered the first law regulating
insurance. This law was followed by Law no. 156/1950 and then Law no.
23/1957 which Egyptianized insurance authorities.
• When a unity between Egypt and Syria was created, Law no. 195/1959 was
issued, repealing and replacing Law no. 156/1950. This law was
regulating the supervision and control over insurance activities in the
United Arab Republic (Egypt-Syria). In 1966, the Insurance Authority and
the Savings Institution were merged into The Egyptian General Insurance
• In 1975, Law no. 119/1975 was issued, and The Egyptian General
Insurance Institution was wound up and replaced by The Egyptian General
Insurance Authority which was established by virtue of Presidential
Decree no. 221/1976. The Authority was assigned to exercise supervision
and control over insurance in Egypt.
• In 1981, Insurance Supervision and Control Law no. 10/1981 was issued.
It was then amended by Law no.91/1995 and Law no. 156/1998 on liberation
of Egyptian insurance market. Thereafter, Law no. 118.2008 was issued,
by then The Egyptian Insurance Supervisory Authority was the entity
assigned to control over compliance with insurance legislations in the
• In 2009, Egypt Financial Supervisory Authority (EFSA) was established
by virtue of Law no. 10/2009 to replace the authorities controlling
capital market, insurance, mortgage finance, financial leasing,
factoring, securitization and all other non-banking activities.
The EFSA is assigned to supervise and control
the companies operating in the Egyptian insurance market, which are:
1) Insurance and Reinsurance Companies
A) Direct Insurance Companies
These companies are specialized for issuing policies (insurance
coverage) for properties, liabilities, persons, fund accumulation
practices and settlement of compensations that fall due when risks occur.
B) Reinsurance Companies
These companies are specialized for covering part of the directly
insured risks, against commission.
2) Cooperative Insurance Associations
A cooperative insurance association is an entity formed in accordance
with the general principles of cooperation. It ensures that members
enjoy insurance system applied by and between them.
3) Private Insurance Funds
It is a system applied by an authority, company, syndicate or
association comprising of individuals practicing the same profession,
involved in the same career or forming social links. The fund grants
members insurance rights in the form of financial benefits to be
determined by and between them.
4) Government Insurance Funds
These funds are assigned to cover the risks that
unusually unacceptable by insurance companies or the risks believed to
be solely covered by the Government.
5) Insurance Pools
Law permits insurers and reinsures to establish, among themselves,
insurance pools to manage an insurance branch or certain insurance
EFSA Main Insurance Duties
1- Protecting the rights of policyholders, beneficiaries and third
2- Ensuring proper achievement of economic and social targets of
insurance activities, and maintaining national savings.
3- Ensuring integrity of financial position of insurance companies in
the market, coordinate and prevent conflicts among them.
4- Contributing in developing insurance awareness among the public in
5- Supporting and developing the insurance market.
6- Elevating insurance careers and effectively participating in the
provision of expertise.
EFSA Insurance Supervisory and Control Role
1) Registration of the Companies and Persons Practicing Insurance
For the purpose of practicing an insurance-related activity, the company
or the person is required by the law to be registered with the EFSA.
Insurance practitioners requiring registration are as follows:
1- Insurance and Reinsurance Companies
2- Cooperative Insurance Associations
3- Representative Offices "for foreign companies"
4- Private Insurance Funds
5- Actuarial Insurance Experts
6- Advisory Insurance Experts
7- Inspection and Damage Assessment Experts
8- Insurance Brokers
9- Auditors of Insurance Companies, acting through the Service Quality
Control Unit of EFSA Listed Auditors
2) Protection of Policyholders' Rights
One of the main priorities and most important targets of the EFSA is to
protect the rights of policyholders, beneficiaries and third parties.
Therefore, the Egyptian Legislator provided a group of mechanisms
enabling the EFSA to ensure proper achievement of such target.
The Egyptian Legislator:
• Required a certain legal form of entities practicing insurance
activities, i.e., to be in a form of Egyptian Joint Stock Company.
• Determined certain capital requirements for the insurance company to
be officially registered and licensed to practice activities.
• Required that the insurance company set aside technical provisions and
that limited activities to the legally prescribed scope of investments.
• Set certain conditions required to be met by the departments' managers
of insurance companies.
• Granted the insured or the policy beneficiary the right to resort to
the EFSA, in case the insurance company refuses to pay the totally or
partially claimed damages. In this respect, the EFSA studies the
conflict arising between parties and gives an opinion within one month
from the date of submission of the related application. The EFSA may
further take steps to settle the conflict by forming a conciliation
committee presided over by the EFSA Chairman or his delegate and
membered by the Chairman of Insurance Federation of Egypt or his
delegate and a number of experts in the field of insurance and Law. The
committee is required to issue a decision within a period of two months
from the date of submission of the application. Any party may also
obtain an official copy of the EFSA opinion or the committee's decision,
as the case may require, for submission to the competent court, provided
that such opinion or decision shall not be binding on the court.
• Upheld the EFSA trend which requires, for approving the terms and
forms of the newly issued or amended insurance policies, that such
policies be issued in a clear and simple shape to avoid the disputes
that may arise in this respect.
• Granted the policyholders a right to resort to the EFSA to interpret
certain clauses in the insurance policy, if such clauses are under
• Required the insurance companies to comply with the principles of
probity vis-à-vis customers, to do for their best interest and to
achieve equality among customers with similar insurance positions.
Insurance companies are further prohibited from discriminating between
customers- with respect to the prices, terms and privileges of policies-
on the grounds of language, religion, sex or social conditions, unless
such conduct is based on a mere actuarial or technical principles
required to be applied by the EFSA.
• Prevented the insurance companies from rejecting insurance or policy
renewal applications and/or limiting the insurance value, unless such
conduct is based on a mere actuarial or technical principles relating to
forecasted losses or due to the insured's failure to abide by his/her
• Required the insurance companies to carry out periodic inspection of
object insured to ensure that the insurance coverage suits the actual
value. Insurance companies are further required to supervise the insured
entity's adoption of the recommendations and precautionary measures
contained in the inspection reports; and in case the insured entity
refuses to take such measures, the insurance company shall cancel
insurance policy and notifies the competent insurance union of such
cancellation with its reasons. The insurance union shall, in turn,
notify its members of such procedure.
• Required the insurance companies to open a complaints-review file in
which all documents regarding complaints shall be deposited. The
insurance company is required to review the complaint and decide
thereupon within a period of thirty days from the date of receiving the
complaint and/or completing related documents, which ever is later. The
company's decision shall be issued, either approving or rejecting the
complaint, and shall record a brief content of the decision in the
The company shall then notify the EFSA of such decision and its reasons
within a period of fifteen days from the said of issuance, in case of
total or partial rejection of the complainant's claims.
• Required the EFSA to open a competent department to receive and review
the complaints raised by customers and policyholders and reply to their
queries received by the EFSA through the Central Department for Market
Services located at: 28 Talat Harb St, 2nd Floor, Cairo. PO: 2545.
3) Examination of Insurance Companies' Activities
The EFSA carries out regular review of insurance and reinsurance
companies, whereby the EFSA confirms the integrity of the companies'
financial positions and their compliance with the Law and the technical
principles governing insurance and reinsurance activities.
Review programs include:
1) A review of policy forms, terms and definitions of the various
insurance types applied by insurers. This review aims at confirming
insurers' full compliance with the forms, terms and definitions approved
and/or notified by the EFSA. It also aims at ensuring price efficiency
and fairness and that insurers' conduct does not cause damage either to
them or to the insurance market.
2) A review of the paid damages, to confirm that such damages were
settled in accordance with the policy terms. This review also studies
the pending claims to verify the reasons for non-settlement thereof.
3) A review of reinsurance activities and arrangements, to confirm that
they are adequate for protection of the financial position of insurers,
and that insurers provide sufficient guarantees.
4) A review of insurer's investment transactions, to confirm that the
insurer complies with the Law; particularly in respect to
insurance-allocated capital adequacy and that such capital is used and
disposed thereof only according to EFSA permissions.
5) A review of the items of financial positions of insurers, to confirm
the insurer's all time compliance with the increase rate of assets
vis-à-vis liabilities, and in this respect:
•The EFSA may conduct a comprehensive review of the insurer's
activities, if there are reasons whereby the EFSA believes that
policyholders' rights may be lost, the insurer may be unable to fulfill
its obligations or the insurer's conduct is proved to have prejudiced
the insurance market.
•If such review seriously indicates that policyholders' rights may be
lost, the insurer may be unable to fulfill its obligations, the
insurer's conduct is proved to have prejudiced the insurance market or
the insurer had violated any provisions of the Law, the EFSA Board of
Directors shall have the right to take the measures believed convenient,
a)Serving notice on the insurer.
b)Restricting the insurer's acceptance of new transactions or renewal of
current transactions with respect to all or part of insurance types the
insurer is permitted to practice.
c)Directing the insurer to prepare a financial position statement and
conclusive accounts during periods of less than one year.
d)Inviting the insurer's board of directors to convene for reviewing the
violations claimed to have been committed and undertaking the procedures
required for removal of such violations. This board meeting shall be
attended by one or more EFSA delegate.
e)Appointing an observer member in the insurer's board of directors for
the period specified by the EFSA board. Such member shall have the right
to participate in the insurer's board discussions and give opinions on
the matters raised for discussion; but shall not be a voting member.
f) Setting aside the distributable profit surplus or part thereof in
support of the net assets of the insurer.
g)Amending the insurer's investment policies and reinsurance
h)Removing one or more executive managers.
i)Winding-up the insurer's board of directors and appointing a delegate
to temporary manage the insurer's company until a new board is formed.
4) Approving Insurance Policies
•The EFSA, when approving the terms and forms of newly issued or amended
insurance policies, seeks to have such policies issued to customers in a
clear and simple shape to avoid the disputes that may arise in this
•Insurers and reinsures are required to provide the EFSA with copies of
the insurance policies and a statement of their prices. The EFSA, in
turn, conducts a periodic review of insurance terms and prices thus
ensuring fair price. The EFSA, after the review is completed, notifies
the insurer of any remarks and requires due implementation thereof in
accordance with the Law.