Regulatory Alerts2015-01-01
Decision of the Chairman of the Egyptian Financial Supervisory Authority No. (72) of 2015 Regarding the Model Articles of Association for Private Insurance Funds
The Egyptian Financial Supervisory Authority issued Decision No. 72 of 2015 to establish a standardized model Articles of Association for Private Insurance Funds. The decision mandates that existing funds amend their governing documents to align with the new model within six months, while requiring founders to obtain prior regulatory approval for any deviations or additions. It further outlines mandatory membership conditions, contribution payment rules, termination procedures, and a framework for disbursing actuarially determined insurance benefits.
Egyptian Financial Supervisory Authority
Decision No. (72) of 2015
Dated 2015/9/3
Regarding the Model Articles of Association for Private Insurance Funds
Chairman of the Egyptian Financial Supervisory Authority
Having reviewed Law No. 54 of 1975 issuing the Law on Private Insurance Funds, and Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; and Decision No. (78) of 1977 of the Minister of Economy and Economic Cooperation issuing the Executive Regulations of Law No. 54 of 1975 concerning Private Insurance Funds; and Decision No. (160) of 1994 of the Minister of Economy regarding amending certain provisions of the Executive Regulations of Law No. 54 of 1975 concerning Private Insurance Funds; and Decision No. (50) of 2005 of the Minister of Investment regarding amending certain provisions of the Executive Regulations of Law No. 54 of 1975 concerning Private Insurance Funds; and Decision No. (109) of 2015 of the Minister of Investment regarding amending certain provisions of the Executive Regulations of Law No. 54 of 1975 concerning Private Insurance Funds; and with the approval of the Authority's Board of Directors in its session held on 2015/9/6.
Decided
Article (1)
The Articles of Association for Private Insurance Funds shall be in accordance with the model attached to this Decision.
Article (2)
The founders of the Fund, in case of wishing to deviate from certain provisions of the attached model Articles of Association or to add other provisions, shall clarify the statement of reasons for such deviation or addition and its justifications, and obtain the Authority's prior approval thereto, all while ensuring non-derogation from mandatory legal provisions.
Article (3)
Private Insurance Funds listed on the date of implementation of this Decision shall amend their Articles of Association to conform to the attached model, within a period not exceeding six months from its implementation.
Article (4)
This Decision shall be published in the Egyptian Gazette and on the Authority's electronic website, and shall take effect from the day following its issuance date.
Chairman of the Authority
Sherif Samy
20 Emad El-Din St. - Cairo - Egypt
Postal Code: 11111 - P.O. Box: 618
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg
Telephone: (+202) 27727133
Fax: (+202) 27741000
Model
Articles of Association for Private Insurance Funds
Established in accordance with the provisions of Law No. 54 of 1975
Concerning Private Insurance Funds
Articles of Association for the Private Insurance Fund
( )
A private insurance fund subject to the provisions of Law No. 54 of 1975 and its Executive Regulations.
Chapter One: General Provisions (1)
Article (1)
The following words and expressions shall have the meanings indicated alongside each of them:
- (a) The Authority: The Egyptian Financial Supervisory Authority.
- (b) The Fund: The Private Insurance Fund.
- (c) The Board of Directors: The Fund's Board of Directors.
- (d) The Entity: The entity by which the Fund was established and its affiliated entities.
- (e) Founding Member (1): The member serving the entity by which the Fund was established on the date of the Fund's establishment, who submits an application to join the Fund within three months from the date of the Authority's decision registering the Fund, as well as members working for the entity on the establishment date who are on secondment or unpaid special leave, provided they submit membership applications within three months from their return to work, and shall pay contributions from the date benefits are calculated and contributions are collected until their joining date to the Fund, bearing an annual investment return not less than the rate stated in the actuarial study.
- (f) Contribution Rate: .........
- (g) Prior Contribution Period: ........
- (h) Subsequent Contribution Period: The actual contribution period with the Fund from (the date of collecting contributions and disbursing benefits) or from the date of joining the Fund for new members.
- When calculating the contribution period, any fraction of a month is rounded up to a full month, and fractions of a year are calculated on a pro-rata basis, while ensuring the contribution for the final month of service is paid in full.
- (i) Service-Ending Disability: Service-ending disability as per the provisions of the prevailing social insurance and labor laws in Egypt.
(1) The determination of the contribution rate, prior contribution period, annual salary progression rate, annual contributions for insurance benefits, and other technical bases stated in these Articles shall be in accordance with what is stated in the actuarial report and note (if any), and the Fund may establish additional controls for the founding member or propose a new definition.
Chapter Two: Establishment of the Fund
Article (2)
The Fund is established in accordance with the provisions of Law No. 54 of 1975 concerning Private Insurance Funds, its Executive Regulations, and the decisions issued for their implementation.
Article (3)
Name of the Fund: ...................
Founder: ...................
Private Insurance Funds issued by Law No. 54 of 1975 and its Executive Regulations, on / /
With the approval of the Authority by Decision No. ( ) of .....
Article (4)
The Fund's principal center and legal domicile shall be at: ...................
Article (5) (2)
Purposes of the Fund:
- ...................
- ...................
- ...................
- ...................
- ...................
Article (6)
The Fund shall have independent legal personality from the date of its registration with the Authority, and the Fund shall be subject to the provisions of Law No. (54) of 1975, its Executive Regulations, decisions issued for their implementation, and the provisions stipulated in its Articles of Association.
(2) The purposes of the Fund shall be specified precisely.
Chapter Three: Membership in the Fund
Article (7)
Conditions for Membership
The following conditions are required for membership in the Fund:
- 1- Be a permanent or temporary employee of the entity by which the Fund was established (1).
- 2- Accept in writing to join the Fund's membership by signing the membership form and accepting the deduction of the contribution value from him.
- 3- Pay contributions on a regular basis.
The maximum age for joining shall be (......) years, and founding members are exempt from the age condition.
Article (8) (3)
Rules for Paying Joining Fees and Contributions
The member is obligated to pay the joining fee to the Fund as well as the required contributions, which are as follows:
- 1- Pay the joining fee for Fund membership amounting to (......).
- 2- Pay the monthly or annual contribution value, or both (......).
- 3- Pay the founding installment – if applicable – estimated at an amount of ( ) on / /.
Members of the Fund who are seconded or on special or unpaid leave are obligated to pay the contributions specified subsequently according to the Articles of Association in advance annually, and in case of delay, the contributions due for this period shall be collected along with an annual investment return not less than the interest rate stated in the actuarial study.
In case the member delays paying the contribution value for two consecutive months, he shall be notified by the Fund via a letter accompanied by a receipt of delivery stating the necessity of payment and the detailed amount to be paid, and if the member fails to pay within a period not exceeding one month from the date of notification, his membership in the Fund shall terminate and his rights shall be settled accordingly.
Article (9)
Termination of Membership Status
Membership status shall terminate in the following cases:
A- Termination of service for one of the following reasons:
- 1- Reaching the legal retirement age.
- 2- Death.
- 3- Service-ending disability (partial/total).
(3) The Articles of Association may stipulate allowing members of the Fund to be employees of entities affiliated with the entity by which the Fund was established.
(3) The joining fee for Fund membership, the monthly or annual contribution value, and the founding installment shall be determined according to what is stated in the actuarial study.
Chapter Four: Financial Benefits (1)
Article (10)
The stipulated insurance benefits shall be disbursed for the following cases alongside each:
| No. | Case | Insurance Benefit |
|---|---|---|
| 1 | Termination of service upon reaching legal retirement age | Termination of service cases |
| 2 | Termination of service due to death | |
| 3 | Termination of service due to total permanent disability | |
| 4 | Termination of service due to partial permanent disability | |
| 1 | Transfer upon member's request | Termination of membership cases |
| 2 | Early retirement | |
| 3 | Dismissal from the Fund | |
| 4 | Resignation or withdrawal from the Fund |
(1) The insurance benefits shall be determined according to what is stated in the expert actuarial report.
Chapter Three: Membership in the Fund
Article (7)
Conditions for Membership
The following conditions are required for membership in the Fund:
- 1- Be a permanent or temporary employee of the entity by which the Fund was established (1).
- 2- Accept in writing to join the Fund's membership by signing the membership form and accepting the deduction of the contribution value from him.
- 3- Pay contributions on a regular basis.
The maximum age for joining shall be (......) years, and founding members are exempt from the age condition.
Article (8) (3)
Rules for Paying Joining Fees and Contributions
The member is obligated to pay the joining fee to the Fund as well as the required contributions, which are as follows:
- 1- Pay the joining fee for Fund membership amounting to (......).
- 2- Pay the monthly or annual contribution value, or both (......).
- 3- Pay the founding installment – if applicable – estimated at an amount of ( ) on / /.
Members of the Fund who are seconded or on special or unpaid leave are obligated to pay the contributions specified subsequently according to the Articles of Association in advance annually, and in case of delay, the contributions due for this period shall be collected along with an annual investment return not less than the interest rate stated in the actuarial study.
In case the member delays paying the contribution value for two consecutive months, he shall be notified by the Fund via a letter accompanied by a receipt of delivery stating the necessity of payment and the detailed amount to be paid, and if the member fails to pay within a period not exceeding one month from the date of notification, his membership in the Fund shall terminate and his rights shall be settled accordingly.
Article (9)
Termination of Membership Status
Membership status shall terminate in the following cases:
A- Termination of service for one of the following reasons:
- 1- Reaching the legal retirement age.
- 2- Death.
- 3- Service-ending disability (partial/total).
(3) The Articles of Association may stipulate allowing members of the Fund to be employees of entities affiliated with the entity by which the Fund was established.
(3) The joining fee for Fund membership, the monthly or annual contribution value, and the founding installment shall be determined according to what is stated in the actuarial study.
Chapter Four: Financial Benefits (1)
Article (10)
The stipulated insurance benefits shall be disbursed for the following cases alongside each:
| No. | Case | Insurance Benefit |
|---|---|---|
| 1 | Termination of service upon reaching legal retirement age | Termination of service cases |
| 2 | Termination of service due to death | |
| 3 | Termination of service due to total permanent disability | |
| 4 | Termination of service due to partial permanent disability | |
| 1 | Transfer upon member's request | Termination of membership cases |
| 2 | Early retirement | |
| 3 | Dismissal from the Fund | |
| 4 | Resignation or withdrawal from the Fund |
(1) The insurance benefits shall be determined according to what is stated in the expert actuarial report.