Law No. 4 of 1975

Issuing the Law on Private Insurance Funds

In the name of the People, the President of the Republic, The People's Assembly has decided the following law, which is hereby issued:

Article 1 — Amends the provisions of the accompanying law regarding private insurance funds whose annual contributions amount to one thousand Egyptian pounds or more. The provisions of Law No. 32 of 1964 concerning Associations and Private Institutions shall not apply to these funds.

Article 2 — The Egyptian General Insurance Authority shall undertake the supervision and oversight of private insurance funds in accordance with the provisions of this Law.

Article 3 — Existing funds at the time of this Law's implementation must submit registration applications in accordance with its provisions within six months from the date of implementation of the Executive Regulations. This registration shall be free of charge.

Article 4 — Chapter Three of Law No. 156 of 1950 concerning the Supervision and Oversight of Insurance Bodies and Capital Formation is hereby repealed. Any provision conflicting with this Law is also repealed.

Official Gazette on July 21, 1975 — No. 31

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Article 5 — The Minister of Social Insurance shall issue the Executive Regulations for this Law. Until these regulations are promulgated, current regulations and decisions shall remain in force insofar as they do not conflict with its provisions.

Article 6 — This Law shall be published in the Official Gazette and shall take effect from the date of its publication.

This Law is compiled in the State System and shall be enforced as one of its laws. Issued at the Presidency on 7 Rajab 1395 AH (July 16, 1975 AD)

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Article 13 — Each fund must have an annual budget, and those responsible for its management must maintain regular accounts covering its revenues and expenditures. The fund's accounts must be audited by an auditor elected by the General Assembly from among those registered in the General Register of Accountants and Auditors. The financial year shall commence on January 1 and end on December 31 of each year, and the Egyptian General Insurance Authority may, in special circumstances, approve that a fund's financial year end on a different date.

Article 14 — The Chairman of the Fund's Board of Directors must submit to the Egyptian General Insurance Authority during the second month following the General Assembly's approval of the budget the following data: (1) The budget. (2) The revenue and expenditure account. (3) A report on the general condition of the fund. (4) A statement of the number of new contributions and their value, and the number of members who ceased during the year and the value of their contributions. In the event that the General Assembly cannot convene due to force majeure affecting the Authority, the aforementioned data shall be submitted within a maximum of three months from the end of the financial year. (5) A statement of the number of claims submitted to the fund during the year and their value, and the compensation that has been settled. The budget and revenue/expenditure account must be certified by the auditor according to the forms set by the Executive Regulations.

Article 15 — The fund's financial position shall be examined by an actuary at least once every five years. This examination shall include an assessment of existing risks. The Board of Directors of the Egyptian General Insurance Authority may, if deemed necessary, request this examination at any time before the five-year period expires, provided the interval is not less than one year from the last examination. It may also exempt a fund from this examination in special circumstances. A copy of the examination report shall be sent to the Egyptian General Insurance Authority within six months from the date of the examination, accompanied by a certificate from the actuary confirming that the fund's management has provided all requested data and information necessary to reach the report. shall be held liable for the fund's commitments. The Authority may extend this period by up to three months. The Authority may order a re-examination if the actuary's report does not reflect the fund's true financial position. The fund shall bear all examination costs in all cases.

Article 16 — Those responsible for the fund's management must make available to members all data required to be submitted to the Egyptian General Insurance Authority under Article 14, and provide a copy to any member requesting it upon payment of one hundred Egyptian pounds per copy. Any fund member may inspect the fund's books and documents after obtaining permission from the Authority.

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Article 20 — Quorum in this case is valid if attended by a maximum number not less than ten percent of the total members or fifty members, whichever is lower. A General Assembly member may appoint another member to represent them at the meeting, but a member may not represent more than one other member.

Article 21 — Decisions of the General Assembly shall be passed by an absolute majority of attending members, except for matters concerning the dissolution of the fund, amendments to its bylaws related to its objectives, dismissal of the Board of Directors, or merger into another fund, which require a two-thirds majority. This applies unless the fund's bylaws stipulate a higher majority.

Article 22 — A General Assembly member shall not participate in voting if the decision under consideration involves extending credit to them, filing a lawsuit against them, or a dispute between them and the fund, or if they have a personal interest in the decision, except for the election of the fund's organs.

Chapter Four

Board of Directors

Article 23 — Each fund must have a Board of Directors. The fund's bylaws shall determine the powers, selection method, and termination of membership of its board members. The number of board members shall not be less than five nor more than fifteen.

Article 24 — A board member must enjoy civil and political rights. Holding board membership and working for the fund for a salary is prohibited, except for the responsible manager.

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Article 25 — Without prejudice to the previous article, the General Assembly may decide to grant a bonus to the Chairman of the Board, Secretary, Treasurer, and Responsible Manager (if a board member), provided an surplus is shown in the actuary's report and approved by the Egyptian General Insurance Authority.

Article 26 — Board membership shall last for three years, with one-third of the members renewed annually by lot.

Article 27 — The Board of Directors shall manage the fund's affairs and may undertake any action to achieve the fund's objectives within the limits of this Law and the fund's bylaws. The fund may convene board meetings once a month to review its affairs. Any member who misses more than half of the board meetings during the year without acceptable excuse shall be deemed to have resigned.

Article 28 — The Chairman of the Egyptian General Insurance Authority shall be invited to attend all board meetings as necessary, via registered mail. The representative who presents matters to the board must ensure the Board of Directors decides on these matters within a maximum of one month from notification.

Article 29 — The Board of Directors of the Egyptian General Insurance Authority may dissolve the fund's board if it determines that the board is not operating in accordance with this Law or the fund's bylaws, following an administrative investigation. In this case, it may appoint an interim board for at least one year. The board must convene an extraordinary general assembly to elect new members before the one-year period expires.

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Chapter Five

Conversion and Deregistration of Funds

Article 30 — Private insurance funds may request the transfer of their assets and liabilities to one or more other funds registered under this Law. Funds whose members share the same profession, occupation, and social connection may be merged upon their request, or if the Egyptian General Insurance Authority deems it necessary.

Article 31 — The Chairman of the Egyptian General Insurance Authority may deregister a fund in the following cases: (1) If the examination under Article 13 reveals that the fund's assets are insufficient to meet its liabilities. (2) If it is established that the fund is not operating in accordance with this Law, its executive decisions, or its bylaws. (3) If the fund's management is marred by fraud or deceit. (4) If the fund ceases operations or if liquidation is in the members' interest. (5) If the fund is merged into another fund. In the first three cases, the fund shall be notified and given a one-month period to present its defense. If unconvincing, registration shall be cancelled and the Authority's Chairman shall appoint a liquidation committee. Deregistration may also be lifted with the approval of the fund's extraordinary general assembly if it reduces compensation/claim values or increases contribution values to make assets sufficient to meet liabilities.

Article 32 — In the event of the fund's dissolution, its net assets shall revert to the members on the date of dissolution or liquidation, and the liquidation proceeds shall be distributed to them in proportion to their contributions.

Chapter Six

Provisions

Article 33 — Any Chairman, board member, or fund representative who operates the fund before registration in the designated register at the Authority or after deregistration shall be punished with imprisonment for not less than one month and not more than one year, and/or a fine of not less than one hundred and not more than five hundred Egyptian pounds. The same penalty applies to anyone who conceals data in documents submitted for supervision or known to fund members with fraudulent intent, or who prevents the submission of required documents and properties. This is without prejudice to an order to hand over these documents and properties.

Article 34 — The Chairman of the fund's board shall be fined not less than ten and not more than one hundred Egyptian pounds for delaying the submission of data referred to in Article 14 beyond the specified deadlines. The same penalty applies for failing to issue the fee referred to in Article 9. The same penalty applies to anyone who refuses to hand over the fund's funds, documents, and books to the managers or employees.