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The Egyptian Insurance Supervisory Authority

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Status as regards Financial Sector Assessment Program ... Two foreign actuaries and 2 loss adjusters obtained licenses and registered in EISA's register ... – PowerPoint PPT presentation

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Title: The Egyptian Insurance Supervisory Authority


1
The Egyptian Insurance Supervisory Authority
EISA
2
The current status of the insurance sector in
Egypt
3
  • The current status of insurance sector in Egypt
  • Market structure
  • Life insurance
  • Non-life insurance
  • Reinsurance
  • Investments
  • Regulation and supervision of insurance

4
  • Market structure
  • The Egyptian Insurance Market composes of -
  • The Supreme Council of Insurance
  • The Egyptian Insurance Supervisory Authority
    (EISA)
  • 17 direct insurance companies, 6 of which are
    composite, 6 are non-life, 3 are
    transacting life insurance, one is transacting
    credit insurance for exports and one cooperative
    society
  • Another 2 new life insurance companies have just
    licensed
  • A specialized reinsurance company
  • 614 Private Insurance Funds
  • The Government Insurance Fund for fidelity
    guarantee
  • Insurance Federation of Egypt
  • Insurance Pools
  • Cargo supervision surveying office of Egypt

5
The Supreme Council of Insurance FORMATION Formed
under the chairmanship of the Minister of
Planning and the membership of - The chairman
of EISA and his deputy - The Chairmen of the
insurance and reinsurance companies - A
representative of the insurance funds. - Two
insurance Professors from the Egyptian
Universities. - A Chancellor from the Council of
State - A representative from the Public Sector
Information Center. Ministry of Planning
Ministry of Finance the trade unions
organization of the insurance sector each of the
auxiliary organs
6
ROLE The Supreme Council of Insurance has the
competence to decide the general objectives of
the insurance activity and to approve the
policies needed for the achievement of these
objectives.
7
The Egyptian Insurance Supervisory Authority
(EISA) EISA has the competence to supervise and
control the insurance activity in Egypt whether
at the establishment, during transaction or at
the termination of the business. The Authority
in particular aims at the implementation of the
following objectives - 1- to protect the rights
of insurance policyholders, the beneficiaries and
third parties. 2 - to secure the achievement of
the economic and social objectives of insurance
activity and preserving the national savings.
8
3 - to secure the soundness of the financial
positions of the Insurance market units,
coordinating among them and preventing any
conflict between them. 4 - to participate in
developing insurance awareness in the country 5
- to strengthen the ties of co-operation and
integration with the other control and
supervisory authorities at the Arab, African, and
world level. 6 - to promote the insurance
professions and to contribute effectively to the
availability of the expertise.
9
Market Structure Table 02/03 Figures
(in L.E. Million)
The premium income for Egypt Re is not added to
the total premium income The foreign
participation of the paid up capital represents
12.3
10
LIFE INSURANCE
11
Life Insurance Business
(in L.E. 000)
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NON-LIFE INSURANCE
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REINSURANCE
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Reinsurance
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INVESTMENTS
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Regulation and supervision of insurance
31
  • Legislation
  • The main insurance legislation regulating the
    insurance market are
  • Act No. 10 of 1981 for the supervision and
    control of insurance in Egypt and its amendments
    by the Act No. 91 of 1995 and Act No. 156 of 1998
  • Act No. 54 of 1975 for the Private Insurance
    Funds and its regulations
  • Act No. 652 of 1955 for Motor Liability Insurance

32
Status as regards liberalization and
privatization Act No. 156/1998 allows private
sector entry into the capital of the state-owned
insurance and reinsurance companies The Act also
removed all restrictions on majority foreign
ownership of insurance companies It also allows
non-Egyptians to manage insurance companies based
in Egypt It is worth to mention here that 8
companies are managed by foreign managing
directors
33
Status as regards Financial Sector Assessment
Program Detailed Assessment Report on Observance
of the Insurance Core Principles and Transparency
of Insurance Regulation was prepared by a lead
insurance specialist from Financial Sector
Department of the World Bank. The assessment was
based on a review of the legal framework, and
focused mainly on the supervisory work of the
Egyptian Insurance Supervisory Authority. As a
result, and according to EISAs adopted plan of
enhancing the supervision standard in an open
market and increased competition, the following
new regulatory decrees have been issued -
34
  • The Ministerial decree No.157 for 1999 for the
    issuance of the Accounting Measures for Insurance
    and Reinsurance companies .
  • The Ministerial decree No. 157 for 2003 amending
    the executive regulation by adding an article for
    setting up an internal control committee and
    applying the principles of corporate governance .
  • According to article (7) of law No.80 of 2002 for
    combating money laundering , the rules and
    measures as well as the executive procedures for
    insurance and reinsurance companies have been
    issued .

35
EGYPT SCHEDULE OF SPECIFIC COMMITMENTS
Modes of supply (1) Cross-border supply (2)
Consumption abroad (3) Commercial presence (4)
Presence of natural persons
  • Insurance Services, the main criteria which the
    economic needs test apply are as follows
  • Surplus demand to traditional classes of
    insurance gives new companies an opportunity of
    working without harmful competition to the market
    or financial positions of existing companies and
    consequently policyholders
  • Exhausting of 50 of the capacity of the existing
    companies, which is calculated on the basis of
    solvency margin, and there is a surplus demand in
    excess of the capacity which enables a new
    company to achieve its purposes.
  • Setting up of a new company leads to an increase
    of total retention in the market taking into
    account the technical considerations.
  • The new companies shall introduce new insurance
    covers.

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  • The Effects of Liberalization
  • The Foreign owned shares in 2002/2003 was 12.3
    of the insurance market capitals and 54.6 of the
    private sector capitals
  • Their share of the life insurance premium was 23
    of the whole market and 73.1 of private sector
  • Their share of the non-life insurance premium was
    10.8 of the whole market and 42 of private
    sector
  • There are 8 foreign managing directors leading 8
    insurance companies
  • There are another 8 foreign chairmen and deputy
    chairmen
  • Two foreign actuaries and 2 loss adjusters
    obtained licenses and registered in EISAs
    register

45
EISA
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