Regulatory Alerts2022-01-01
Decision of the Chairman of the Authority No. (2301) for 2022 Regarding Regulations for Settling Claims in Supplementary Motor Insurance
The Financial Regulatory Authority issued Decision No. (23-1) for 2022 to establish binding regulations for settling claims in the supplementary motor insurance sector. The decision mandates that vehicles are not classified as total losses if repair costs exceed 50% of the insured amount, caps client deductibles at 25% for partial losses while exempting total losses, and requires companies to provide certified loss ratio statements when clients transfer policies. Furthermore, licensed insurers must align their policy forms with these rules within six months of the decision's publication.
FINANCIAL REGULATORY AUTHORITY
CHAIRMAN OF THE AUTHORITY
Decision No. (23-1) for 2022
Date: 13/5/2022
Regarding the Regulations for Settling Claims in Supplementary Motor Insurance
Having reviewed Law No. 10 of 1981 issuing the Law on Supervision and Control of Insurance in Egypt and its executive regulations;
and its amendments;
and Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments;
and the Executive System of the Financial Regulatory Authority issued by Presidential Decree No. 192 of 2009;
and the letter from the Egyptian Insurance Union regarding the Executive Council's approval of property insurance and union levels, convened on 30/11/2022;
and the memorandum from the Central Administration for Supervision and Control of Insurance dated 14/12/2022 on this matter.
DECIDES
Article One
(General Regulations)
Insurance companies and associations licensed by the Authority to practice supplementary motor insurance are committed, when settling claims submitted by clients, to the following:
-
1- A vehicle shall not be considered a total loss if the repair cost of the claimed vehicle, based on approved repair standards, exceeds 50% of the insured amount.
-
2- Insurance companies are committed, in case of a dispute between the insured (client) regarding the market value assessment of the vehicle at the time of claim settlement, to engage one or more loss assessors to reassess the market value of the claimed vehicle, at the company's expense, with the client continuing to bear their share until a further decision by the Authority on this matter.
-
3- The client's deductible is calculated at 25% of the value of claims and their derivatives, applying only to partial losses; this deductible does not apply in total loss cases.
-
4- When a client wishes to transfer the insurance of their insured vehicles to another insurance company, the current insurance company is committed to providing the receiving insurance company with a detailed statement of the client's loss ratio, certified by the current company.
Article Two
(Conformity)
In accordance with the aforementioned regulations, insurance companies and associations licensed to practice supplementary motor insurance are committed to amending their supplementary motor insurance policy forms to align with the regulations contained in this decision, within a period not exceeding six months from the date of issuance of this decision.
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 date. It shall be communicated to the concerned departments for implementation.
Chairman of the Board of Directors
Financial Regulatory Authority
Dr. Mohamed Fared Saleh
Smart Village, Building 136, Giza, Egypt
Postal Code: 110
Telephone: +202 35745350
Fax: +202 35760066
WWW.FRA.GOV.EG
ARAB REPUBLIC OF EGYPT
Building Bridges not Walls