Regulatory Alerts2007-01-01
Law No. 72 of 2007 Issuing the Law on Compulsory Insurance for Civil Liability Arising from Accidents Involving Rapid Transport Vehicles within the Arab Republic of Egypt
The Egyptian People's Assembly enacted Law No. 72 of 2007 to mandate compulsory civil liability insurance for rapid transport vehicles operating within Egypt, replacing prior legislation and establishing standardized coverage limits. The law requires vehicle owners to secure policies from licensed insurers, sets maximum compensation at 40,000 EGP for death or permanent total disability and 10,000 EGP for third-party property damage, and mandates direct payment to claimants without prior litigation. It further establishes a government compensation fund for uninsured or unidentified vehicles, outlines insurer recourse rights against negligent insured parties, and imposes administrative fines for non-compliance.
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Law No. 72 of 2007
Issuing the Law on Compulsory Insurance for Civil Liability Arising from Accidents Involving Rapid Transport Vehicles within the Arab Republic of Egypt
In the Name of the People President of the Republic
The People's Assembly has decided the following law, which is hereby issued:
(Article 1) The provisions of the accompanying law regarding compulsory insurance for civil liability arising from accidents involving rapid transport vehicles within the Arab Republic of Egypt shall be applied.
(Article 2) The provisions of the Law on Supervision and Control of Insurance in Egypt issued by Law No. 10 of 1981 shall apply to matters not addressed in this Law and to the extent that they do not conflict with its provisions.
(Article 3) Law No. 652 of 1955 concerning compulsory insurance for civil liability arising from car accidents is hereby repealed, along with any provision that conflicts with the provisions of this Law.
(Article 4) The Executive Regulation of this Law shall be issued by a decision of the Minister of Investment within three months from the date of its issuance. Until this regulation is issued, the existing regulations and decisions shall remain in force to the extent that they do not conflict with the provisions of the accompanying Law.
(Article 5) This Law shall be published in the Official Gazette and shall take effect one month after its publication. The obligation stipulated in Article (3) of the accompanying Law shall apply from the date of expiration of the valid compulsory insurance policy for the vehicle on the date this Law takes effect. This Law shall be sealed with the State seal and enforced as one of its laws. Issued at the Presidency of the Republic on 12 Jumuada al-Awwal, 1428 AH (Corresponding to May 29, 2007 AD)
Hosni Mubarak
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Law
Compulsory Insurance for Civil Liability Arising from Accidents Involving Rapid Transport Vehicles within the Arab Republic of Egypt
Article (1) Insurance must be obtained for civil liability arising from accidents involving rapid transport vehicles licensed to operate in accordance with the provisions of the Traffic Law. The insurance shall cover cases of death and personal injury, as well as material damage to third-party property, excluding the vehicle's tires, in accordance with the provisions of the insurance policy issued in implementation of this Law.
Article (2) Within the scope of applying the provisions of this Law, unified motor insurance cards for vehicles traveling across Arab countries, or insurance policies, cards, or certificates issued in accordance with international conventions in force in the Arab Republic of Egypt, shall be accepted, provided that the insurance under these cards, policies, or certificates remains valid throughout the period the vehicle stays in the Arab Republic of Egypt and establishes the civil liability stipulated in the preceding Article, and that the Egyptian insurance company committed to settling the resulting compensation is indicated on the card, certificate, or policy.
Article (3) The obligation to obtain insurance falls upon the vehicle owner or the person legally authorized to drive it.
Article (4) Subject to the provision of Article (2) of this Law, insurance shall be placed with one of the insurance companies registered with the Egyptian Insurance Authority and licensed to conduct the automobile insurance and related consumer insurance branches under the provisions of Law No. 10 of 1981. These companies are obligated to accept the aforementioned insurance and issue the relevant policies.
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Article (5) Each vehicle shall have its own insurance policy conforming to the model issued by a decision of the Board of Directors of the Egyptian Insurance Authority. The aforementioned insurance policies and their renewal documents shall be retained by the competent traffic department in the vehicle's file (physically or electronically), and they shall not be withdrawn or canceled as long as the vehicle's license remains valid, and such cancellation shall not affect third parties. In case of transfer of ownership to a third party, the original or renewed policy shall apply to the new owner for the remaining period, subject to the conditions and procedures specified in the Executive Regulation of this Law.
Article (6) The validity of the insurance policy shall extend throughout the period of the vehicle's operating license, and during the period allowed for license renewal according to the Traffic Law, the renewal shall take effect from the day following the expiration of the license period until the end of the renewal period.
Article (7) A decision by the Board of Directors of the Egyptian Insurance Authority shall be issued to determine the maximum insurance prices stipulated in Article (1) of this Law, based on the technical and economic studies relied upon in this regard. Furthermore, the Authority may determine additional prices for this insurance in cases where insurance risks increase, all subject to the opinion of the Ministry of Interior and the approval of the Prime Minister. Insurance companies must adhere to these prices in the policies they issue.
Article (8) The insurance company shall pay the insurance amount specified for the accidents referred to in Article (1) of this Law to the entitled person or their heirs, without the need to resort to litigation in this regard. The insurance amount payable by the insurance company shall be forty thousand pounds in cases of death or permanent total disability, and the amount in cases of permanent partial disability shall be determined according to the percentage of disability. The insurance amount for damages to third-party property shall be capped at ten thousand pounds. The Board of Directors of the Egyptian Insurance Authority shall determine the manner and conditions for paying the insurance amount to the entitled persons in each of the aforementioned cases, provided that the insurance amount is disbursed within a period not exceeding one month from the date the insurance company is notified of the accident.
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Article (9) The injured party or their heirs may take legal action prior to the settlement of the accident and the waiver of civil rights to claim amounts exceeding the insurance coverage.
Article (10) The insurance company shall not pay the insurance amount to the agent of the injured party or their heirs unless a special, authenticated power of attorney is issued after the insurance amount has been determined, in accordance with Article (8) of this Law. The power of attorney must specify the insurance amount and grant the agent the right to receive it from the insurance company.
Article (11) In the event that the Public Prosecution receives a report or an investigative record prepared by a judicial police officer regarding an accident that entitles compensation under the provisions of this Law, an inquiry shall be made with the competent traffic department regarding the name of the insurance company covering the vehicle and the name of the insured, and this shall be recorded in the investigation file. The prosecution shall notify the insurance company of the occurrence of the accident.
Article (12) The insured or their representative is obligated to notify the insurance company of the accident caused by the vehicle – for which compensation is due under this Law – within fifteen days from the date of its occurrence. They must take all necessary precautions and measures to prevent the aggravation of the resulting damages. They are also obligated to submit to the insurance company all papers and documents related to the accident upon receiving them. If the insured fails to comply with any of the obligations stipulated in the preceding two paragraphs, the insurance company shall have the right to seek recourse against them for the damages caused thereby, unless the delay is justified.
Article (13) If liability for an accident entitling the insurance amount under this Law is shared between two or more vehicles, the injured party or their heirs have the right to obtain the insurance amount stipulated in Article (8) of this Law from any of the insurers of the vehicles involved in the accident. The settlement of the insurance amount among the insurance companies shall be shared equally among them.
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Article (14) If the injured person dies or suffers permanent total disability as a result of the accident within one year from the date of its occurrence, and it is proven by an approved medical certificate that the death or permanent total disability was a result of the accident, the insurance company must pay the entitled person or their heirs the insurance amount due for death or permanent total disability stipulated in Article (8) of this Law, or complete the insurance amount previously paid to reach the full limit.
Article (15) The lawsuit of the injured party against the insurance company is subject to the statute of limitations stipulated in Article (753) of the Civil Code.
Article (16) The injured party or their heirs shall aggregate the insurance amount stipulated in this Law with any other claim due under optional insurance policies concluded to cover personal injuries or death arising from vehicle accidents.
Article (17) The insurance company, if it pays the insurance amount in a case where civil liability was incurred by someone other than the insured or someone other than the licensed driver of the vehicle, has the right to seek recourse against the liable party to recover the compensation paid.
Article (18) The insurance company may seek recourse against the insured for the amount of compensation paid if it is proven that the insurance was concluded based on the insured providing false information or omitting material facts that affect the insurance company's assessment of its willingness to cover the risk or the insurance price or terms, or if the vehicle was used for purposes not permitted by the license.
Article (19) The right of recourse granted to the insurance company under the provisions of the two preceding Articles shall not prejudice the injured party's right to seek recourse against the liable party for civil rights.
Official Gazette - No. 21 (Repeated) dated May 29, 2007
Article (20) A government fund shall be established in accordance with the provision of Article (24) of Law No. 10 of 1981 to cover damages resulting from accidents involving rapid transport vehicles in the following cases:
- 1 - The vehicle responsible for the accident is unknown.
- 2 - The vehicle is not insured for third-party liability.
- 3 - Accidents involving vehicles exempt from licensing procedures.
- 4 - Cases of total or partial insolvency of the insurance company.
- 5 - Other cases decided by a decision of the Board of Directors of the Egyptian Insurance Authority.
The fund shall pay the insurance amount to the entitled persons in accordance with Article (8) of this Law. It has the right, in the cases stipulated in items (2 and 3) of the preceding paragraph, to seek recourse against the owner of the car or vehicle or the person liable for the damage for the value of the insurance amount paid. A decision by the Prime Minister shall govern the fund's system. Insurance companies shall contribute to funding the fund as a percentage of premium revenues according to their average market share in the compulsory insurance activity, and this percentage shall be determined by a decision of the Minister of Investment based on a technical report prepared by the Egyptian Insurance Authority regarding these revenues.
Article (21) Without prejudice to any stricter penalty stipulated in another law, anyone who violates any of the provisions of Articles (3), (4), (7), (8), (10) of this Law shall be punished with a fine not less than five thousand pounds and not exceeding twenty thousand pounds. Criminal liability shall be imposed on legal persons if the violation occurs against them. Anyone who violates the provision of Article (12) of this Law shall be punished with a fine not less than one thousand pounds and not exceeding five thousand pounds.