Decision of the Board of Directors of the Financial Regulatory Authority

No. (37) of 2019 dated 2019/2/24

Regarding the Conditions and Regulations for Registering Electronic Collection Companies for Compulsory Car Insurance Premiums and Fast Transport Vehicles with the Authority

Board of Directors of the Financial Regulatory Authority

After reviewing the Insurance Supervision and Control Law in Egypt issued by Law No. 10 of 1981 and its executive regulations; And the Law on Joint Stock Companies, Companies with Limited Liability by Shares, Limited Liability Companies, and Single-Person Companies issued by Law No. 159 of 1981 and its executive regulations; And the Capital Market Law issued by Law No. 95 of 1992 and its executive regulations; And the Law on Compulsory Insurance for Civil Liability Arising from Accidents of Fast Transport Vehicles within the Arab Republic of Egypt issued by Law No. 72 of 2007; And Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments; And the Statutes of the Financial Regulatory Authority issued by Presidential Decision No. 192 of 2009; And the memorandum from the Central Administration for Insurance Supervision and Control dated 2019/2/20; And the approval of the Board of Directors in its session held on 2019/2/24.

Decided

(Article One)

The Authority shall establish a register for the registration of electronic collection companies for compulsory car insurance premiums and fast transport vehicles, in accordance with the provisions of the aforementioned Law No. 72 of 2007 and the decisions issued to implement it. The register shall include the main information and data determined by the Authority for each company or entity registered therein, specifically:

• a- The name of the company or entity, its legal form, and its address.
• b- Its head office address.
• c- The name of its legal representative.

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(Article Two)

Conditions for Registration in the Register

Companies and entities wishing to be registered in the register must meet the following conditions:

• 1- It must be established as an Egyptian joint stock company.
• 2- Its sole activity must be electronic collection, as evidenced in its commercial register.
• 3- Its paid-up capital must not be less than five million Egyptian pounds.

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(Article Three)

Registration Procedures and Documents

Companies and entities wishing to be registered must submit an application to the Authority accompanied by the following documents:

• 1- The preliminary deed, the articles of association, and all amendments thereto.
• 2- An original, recent extract from the company's commercial register.
• 3- A certificate from the competent court confirming that no bankruptcy rulings have been issued against the company.
• 4- The company's annual financial statements for the three years preceding the date of the registration application.
• 5- A professional liability insurance policy from one of the Egyptian insurance companies licensed by the Authority, covering the Authority's risks up to a liability limit of 10% of the total premiums collected for one year, with the liability limits to be reviewed annually based on the results of the final financial statements.
• 6- The declarations prepared by the Authority for this purpose.

Registration shall be effected by a decision of the Chairman of the Board of Directors.

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(Article Four)

Supervision Controls for Electronic Collection Companies

and Conditions for Contracting with Insurance Companies

• 1- The electronic collection company must submit to the Authority the draft contract concluded between it and the insurance company to obtain the Authority's approval, ensuring compliance with the controls and instructions issued by the Authority in this regard.

• 2- The contract concluded between the electronic collection company and the insurance company shall be limited solely to the collection of compulsory car insurance premiums, without the collection company having any role in issuing, distributing, or marketing compulsory car insurance policies on behalf of the insurance companies.

• 3- The electronic collection company must regularly and daily report to the insurance company as follows:

  • a- A report detailing all data regarding electronic collection (payment) operations for policies issued by insurance companies, as well as the aggregate data of those collections.
  • b- All policy data, including but not limited to the policy number, issue date, insurance start date, and insurance end date.
  • c- All data of the policyholders from whom premiums were collected, including but not limited to the full name, place of residence, phone number, etc.
  • d- Vehicle registration license data, including but not limited to the car type, engine capacity/cargo capacity, model, chassis number, engine number, traffic department, and insurance duration.

• 4- The electronic collection company must deposit the collected funds into the insurance company's bank accounts within a period not exceeding five days from the date of collection.

• 5- The electronic collection company must regularly provide the insurance company, every Thursday of each week, with bank statements confirming the deposit of those collections into the insurance company's bank accounts. In case of breach or delay by the electronic collection company in fulfilling its obligation, the insurance company shall have the right to claim damages from the electronic collection company and demand the return of the collected amounts (policy premiums).

• 6- It is confirmed that the activity of the collection company does not exceed the collection of compulsory insurance premiums only, without engaging in any other activity, in accordance with the license granted to it by the Authority.

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(Article Five)

Conditions for Continued Registration

To maintain registration in the register, electronic collection companies must comply with the provisions of the Board of Directors' decisions regulating this activity and the controls governing it.

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(Article Six)

Duration of Registration in the Register

The registration period in the register shall be three years and may be renewed for similar periods, provided that the conditions for registration and continuation are met.

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(Article Seven)

Renewal of Registration in the Register

The company must submit an application to renew its registration within the three months preceding the expiration of its registration, accompanied by the documents specified by the Authority for this purpose. Renewal shall be effected by a decision of the Chairman of the Board of Directors.

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(Article Eight)

Re-registration in the Register

In the event that the Authority issues a decision to strike the company off the register, the company may submit an application for re-registration after removing the grounds for striking off and cancellation, accompanied by the documents specified by the Authority for this purpose. Re-registration shall be effected by a decision of the Chairman of the Board of Directors.

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(Article Nine)

Registration and Review Fees

1. The electronic collection company must pay a fee of twenty-five thousand Egyptian pounds for the review and examination of the registration, renewal, or re-registration application.

2. The electronic collection company must pay the development fee agreed upon in Article (14) of the aforementioned Law No. 10 of 2009, at a rate of two per thousand of the company's revenues arising from the collection of compulsory insurance premiums for fast transport vehicles.

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(Article Ten)

Administrative Measures

The Board of Directors of the Authority, upon losing one of the conditions for continued registration in the register based on a memorandum prepared by the competent administration of the Authority, may take one or more of the following measures:

1. Issuing a warning regarding the alleged violations and specifying the time period required to remove their causes.

2. Replacing all or some members of the actual management to raise the professional competence level of the team members and improve their qualifications or training.

3. Suspending the registration in the register for a period not exceeding one year.

4. Striking off the register and canceling the license.

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(Article Eleven)

Clarification of Status

Electronic collection companies operating in the Egyptian market and currently lacking the Authority's approval to contract with insurance companies for collecting compulsory insurance premiums must regularize their status within a period not exceeding three months from the date of entry into force of this decision. The Board of Directors of the Authority may extend this period for similar durations.

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(Article Twelve)

Obligations of Insurance Companies

1- Insurance companies may deal with one of the electronic collection companies registered in the register maintained by the Authority, provided they obtain approval from the Authority and conclude a contract approved by the Authority in advance.

2- Insurance companies must submit a quarterly statement to the Authority regarding the volume of operations (operation log) conducted through electronic collection companies.

3- Refrain from dealing with any electronic collection company not registered with the Authority.

4- Notify the Authority of any violation attributed to electronic collection companies.

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(Article Thirteen)

Establishment of the Compulsory Car Insurance Association

In the event of the establishment of a Compulsory Car Insurance Association, it shall replace the insurance companies that are members of it in contracting with electronic collection companies licensed by the Authority, in accordance with the controls that the Authority will specify in this regard.

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(Article Fourteen)

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
Dr. Mohamed Omran