The Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

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Chairman

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Decision of the Board of Directors of the Financial Regulatory Authority

No. (166) for the year 2019 dated 2019/12/22 Regarding the amendment of Decision No. (16) for the year 2019 issuing the standard group microinsurance contract to cover beneficiaries of microfinance

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Board of Directors of the Financial Regulatory Authority

After reviewing Law No. 10 of 1981 concerning supervision and control of insurance in Egypt and its executive regulations and amendments; And Law No. 10 of 2009 concerning the regulation of supervision on non-banking financial markets and instruments; And Law No. 141 of 2014 concerning the regulation of microfinance activities; And Presidential Decree No. 192 of 2009 issuing the Basic Statute of the Financial Regulatory Authority; And Board of Directors Decision No. 173 of 2014 regarding the rules and regulations for companies practicing microfinance activities; And Board of Directors Decision No. 31 of 2015 regarding the rules and standards for practicing microfinance activities by associations and civil society institutions; And Board of Directors Decision No. 15 of 2019, regarding the amendment of Decisions No. 173 of 2014 and No. 31 of 2015 respectively; And the memorandum from the Central Administration for Financial Product Approval dated 2019/11/14; And the approval of the Board of Directors issued on 2019/12/22.

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Decided

(Article One)

The text of Article One of Decision No. 16 of 2019 issuing the standard group microinsurance contract model to cover beneficiaries of microfinance is replaced as follows:

(Insurance companies – licensed to practice life insurance and fund formation operations, and those licensed to practice property and liability insurance operations – wishing to cover beneficiaries of microfinance from granting entities (Associations/Civil Society Institutions from Categories (A) and (B) / Companies)

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(Article Two)

Life insurance and fund formation companies, and property and liability insurance companies are required to regularize their status in accordance with this Decision within a period not exceeding six months from the date of issuance of this Decision.

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(Article Three)

This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall be enforced from the date of its issuance.

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Chairman of the Board of Directors Dr. Mohamed Omran

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Smart Village, Building 136, Giza, Egypt Postal Code: 110 Tel: +202 2534530 Fax: +202 35370036 WWW.FRA.GOV.EG

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Building Bridges not Walls نبنى الجسور لا الحواجز

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Form (A)

(Specific to Life Insurance and Fund Formation Companies)

Group Life Insurance Contract for the Esteemed Clients of

Associations / Civil Society Institutions / Microfinance Companies

This contract is drafted on the date: / / – between:

First: Life Insurance Company ........... Full company details ...........

"The First Party – hereinafter referred to as (the Company)"

Second: The Association / or Civil Society Institution / Microfinance Company ........... Full details of the Association, Institution, or Microfinance Company ...........

"The Second Party – hereinafter referred to as (the Contractor)"

And it has been agreed between them as follows:

Preamble

In light of the "Second Party's" desire to contract with the "First Party" for life insurance on its microfinance clients to cover natural death / accidental death / or total permanent disability.

To achieve this desire, the "First Party" has accepted to conclude this insurance under the terms and benefits set forth in this contract.

And after both parties acknowledged their legal capacity to contract and dispose, they agreed to conclude this contract according to the following clauses and conditions:

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Clause One

Contract Conditions

The aforementioned preamble, any additional appendices, and the data sheets of the Second Party's clients covered by insurance (including name, date of birth, national ID number, and the outstanding loan balance amount (the decreasing insurance amount for each insured – client – taken as the basis for calculating premiums), after being signed by the Contractor and approved by the insurance company, and the Compact Disc (CD) containing the data of these sheets – if available – are an integral part of this contract.

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Clause Two

Effective Date

This insurance is valid for a period starting from (----/--/--) and ending on (----/--/--), including both dates, and may be renewed for other periods, based on the contract's results.

And with the approval of both parties to the contract, and the approval of the Financial Regulatory Authority.

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Clause Three

Parties Covered by Insurance

This insurance covers all clients affiliated with the Contractor's microfinance loans (the insured), whose names and data are listed in the sheet referred to in Clause One, with an insurance amount equal to the outstanding loan balance, and it is required that the insured's age at the start of insurance does not exceed 60 years.

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Clause Four

Insurance Amount – Scope of Coverage – Acceptance Policy

A. Insurance Amount: It is the outstanding microfinance loan balance owed by the insured to the Contractor, which is notified to the insurance company by the Contractor, and on the basis of which the last monthly insurance premium was paid to the insurance company.

B. Insurance Coverage and Duration: Insurance coverage for each insured starts from the date specified in the data provided by the Contractor to the insurance company, and ends with the expiration of the loan term.

Insurance coverage does not apply to the person whose life is insured, unless the Contractor sends the insured's data including their name, national ID number, date of birth, insurance amount, and insurance duration, and the sheet must indicate the Contractor's commitment to pay the insurance premiums due for the insureds listed within fifteen working days from the date of delivering the payment claim.

C. Acceptance Policy: Insureds from the Contractor are accepted automatically without medical examination, with the Contractor's commitment to include all microfinance recipients without exception in the periodic monthly list sent to the insurance company.

The insurance company has the right to request the document proving the lending contractual relationship between the Contractor and the insured clients (presumed).

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Clause Five

Guaranteed Benefits

In the event of the insured's natural death and / or accidental death and / or in the event of total permanent disability for any reason, the insurance company is committed to paying the Contractor an insurance amount equal to the outstanding (remaining) balance of the microfinance / loan.

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Clause Six

Risks Not Covered by This Contract

This insurance does not cover the following risks:

1. A crime committed by the insurance beneficiary directly or indirectly.
2. Nuclear radiation or chemical or biological contamination.
3. Any HIV/AIDS cases existing prior to the insurance start date.

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Clause Seven

Total Permanent Disability

It is a condition where the insured suffers from total permanent disability that is incurable for at least six consecutive months without improvement, and permanently and completely prevents the insured from continuing their occupation or any other work they can earn from. The following cases are considered in particular as covered total permanent disability cases under this insurance:

1. Total and incurable loss of both eyes.
2. Total and incurable paralysis of both arms or hands, or loss or amputation of both arms or hands.
3. Total and incurable paralysis of both legs or feet, or loss or amputation of both feet.
4. Total and incurable paralysis of one arm and one leg, or one hand and one foot, or loss of one arm and one leg, or loss of one hand and one foot, or amputation thereof.

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Clause Eight

Insurance Premiums

Premiums are calculated to cover the guaranteed benefits based on the total amount of microfinance / loans obtained by the insureds and still outstanding, by applying a uniform rate – one qirsh per thousand pounds monthly – excluding all prescribed fees, stamps, and the policyholders' guarantee fund contribution.

This rate is reviewed at the end of each insurance year based on the contract's results, and the parties agree on the new rate in case of amendment, after approval by the Authority.

All fees and taxes imposed on various types currently and which may be imposed in the future on insurance premiums are borne by each party according to the provisions of laws and regulations issued in this regard.

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Clause Nine

Documents to be Submitted

• A written request for payment of the insurance amount for this contract is submitted to the Company, handwritten against the receipt signature or via fax or email, which is attached by registered letter or by any other means agreed upon between the insurance company and the Contractor.

• The entity or person authorized to submit the claim for benefits under the contract is the Contractor, and this request is submitted with supporting documents for payment and any other documents requested by the insurance company under this contract, within a period not exceeding six months from the date of the occurrence of the risk causing the claim.

• The following documents are attached in addition to the request submitted for payment of insurance benefits in the event of the insured's death, whether:

  1. A certified photocopy of the insured's national ID from the Contractor.
  2. The original death certificate indicating the cause of death or a certified copy from the Contractor.
  3. Any document – if available – proving the right to payment.
  4. The insured's account statement from the beginning of the loan until the date of death, indicating the debit balance.

• The following documents are attached in addition to the request submitted for payment of insurance benefits in the event of total permanent disability of the insured:

  1. A certified photocopy of the insured's personal ID from the Contractor.
  2. A medical report from an entity agreed upon between the parties at the time of contracting, indicating the cause and date of disability.
  3. The insured's account statement from the beginning of the loan until the date of total permanent disability, indicating the debit balance.

• The "Contractor" must notify the "Insurance Company" of any changes that may occur to the "Insureds" monthly regarding entry or exit, according to the monthly statement sent to the Contractor by the Company. Also, the data, declarations, and other documents submitted by the Contractor to the insurance company form the basis for this insurance, and the Contractor guarantees their accuracy and conformity with the truth, and the consequences of any breach thereof.

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Clause Ten

Payment of Due Insurance Amounts

• The insurance company is committed to paying the amounts due under this contract directly to the Contractor, the insured, or the beneficiaries, each according to their share, within a period not exceeding five working days from the date of submitting all documents specified in Clause Nine, and verifying their authenticity, according to the timeline agreed upon between the parties as follows:

  1. The insurance company pays the outstanding loan balance to the Contractor in the event of a claim for insurance benefits, as specified in this contract according to the last balance on which the installment was paid.
  2. In cases where it is proven that the insured's loan balance at the time of death or disability is less than the insurance amount for which the premium was paid, and provided that the insurance has previously been paid to the insured or to the beneficiaries designated by them or their legal heirs according to the inheritance notification.

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Clause Eleven

Insurance Cards

The data provided by the Contractor and all other documents submitted to the insurance company have been accepted in the utmost good faith, and are considered the basis for issuing this contract. Any material error in the data of any of the insureds, or if the information provided requires an error intended to deceive the company, then the insurance on the insured whose data contains this error is voided.

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Clause Twelve

Competent Courts

Any dispute that may arise, God forbid, due to the coverage or interpretation of any clause of this contract, falls under the jurisdiction of the Egyptian courts where the "First Party" is administratively located.

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Clause Thirteen

Copies of the Contract

This contract is drafted in three identical copies, each party keeps one copy to work according to it in case of disputes, and the third copy is delivered to the Financial Regulatory Authority.

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First Party Details Second Party Details

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Form (B)

(Specific to Property and Liability Insurance Companies)

Group Life Insurance Contract for the Esteemed Clients of

Associations / Civil Society Institutions / Microfinance Companies

This contract is drafted on the date: / / – between:

First: Insurance Company ........... Full company details ...........

"The First Party – hereinafter referred to as (the Company)"

Second: The Association / or Civil Society Institution / Microfinance Company ........... Full details of the Association, Institution, or Microfinance Company ...........

"The Second Party – hereinafter referred to as (the Contractor)"

And it has been agreed between them as follows:

Preamble

In light of the "Second Party's" desire to contract with the "First Party" for life insurance on its microfinance clients to cover natural death / accidental death / or total permanent disability.

To achieve this desire, the "First Party" has accepted to conclude this insurance under the terms and benefits set forth in this contract.

And after both parties acknowledged their legal capacity to contract and dispose, they agreed to conclude this contract according to the following clauses and conditions:

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Clause One

Contract Conditions

The aforementioned preamble, any additional appendices, and the data sheets of the Second Party's clients covered by insurance (including name, date of birth, national ID number, and the outstanding loan balance amount (the decreasing insurance amount for each insured – client – taken as the basis for calculating premiums), after being signed by the Contractor and approved by the insurance company, and the Compact Disc (CD) containing the data of these sheets – if available – are an integral part of this contract.