The General Authority for Financial Supervision

FINANCIAL REGULATORY AUTHORITY

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Chairman of the Authority

Decision No. (132) of 2020 dated 16/8/2020

Regarding the Rules for Participation in the Capital of Insurance Companies

The Board of Directors of the General Authority for Financial Supervision

Having reviewed the Law on Supervision and Control of Insurance in Egypt issued by Law No. (10) of 1981 and its Executive Regulations;
And Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;
And the Minister of Investment and International Cooperation Decision No. (117) of 2018 determining the percentage of shares owned by insurance and reinsurance companies in other companies;
And the Authority's Board of Directors Decision No. (53) of 2018 regarding the rules for granting and maintaining licenses and the rules for owning shares of companies operating in non-banking financial activities;
And after the approval of the Authority's Board of Directors in its meeting held on 16/8/2020;

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Has Decided

(Article One)

Without prejudice to the provisions of Articles (27 bis 1, 40) of the Law on Supervision and Control of Insurance in Egypt and the Authority's Board of Directors Decision No. (53) of 2018 regarding the rules for granting and maintaining licenses and the rules for owning shares of companies operating in non-banking financial activities, natural or legal persons who own a controlling stake in one insurance company shall not, directly or indirectly, alone or through their related parties, participate in any other insurance company engaged in the same activity, except in a single other insurance company, with a percentage less than (25%) of the shares or voting rights of that company.

The participation percentage may be increased beyond the aforementioned percentage in the preceding paragraph if the ownership request is accompanied by a binding plan for the merger of the two mentioned insurance companies, provided that the merger process is executed within a maximum of one year from the date of submitting the request and in accordance with the conditions approved by the Authority's Board of Directors in this regard.

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(Article Two)

In the event of a violation of the preceding paragraph, the voting rights and dividend distributions pertaining to the shares exceeding the authorized percentage shall be suspended, and the violator shall be required to dispose of the excess percentage within one year from the date of its notification to them; otherwise, the Authority shall have the right to order the appointment of a brokerage company to undertake the sale procedures for the non-compliant shares, with the net proceeds of the sale accruing to the shareholder after deducting expenses.

(Article Three)

This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the day following its publication in the Egyptian Gazette.

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Chairman of the Board of Directors of the Authority
Dr. Mohamed Omran

27.06

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