Chapter Nine Controls of Practice of Banks Bancassurance Activity

First: Controls of Banks Advertising and Promoting Insurance Products 1

-1 Compliance with the provisions of Law No. 10 of 1981 issued regarding supervision and control of insurance in Egypt and its executive regulations, and prohibition of concluding agreements with an insurance company whereby the bank undertakes to mediate in insurance contract operations or issue policies on behalf of those companies or settle claims on their behalf.

-2 With regard to advertisements that banks may publish based on an agreement with one of the insurance companies, the following must be observed: Necessity that the advertisement of any insurance products for some insurance companies includes the full name of the insurance company through which the insurance is intended to be effected.

Prohibition of including the phrase "Free Insurance" in advertisements.

-3 Compliance with the provisions of the law, particularly regarding the preservation of account confidentiality.

-4 Observing what sound internal control systems require - in the event of the presence of employees of one of the insurance companies in one of the bank's units according to an agreement between the bank and the company - the necessity of complete separation between the bank's business and the insurance company's business, as well as the existence of separate computerization systems for each.

Second: Controls of Practice of Banks Bancassurance Activity 2

Banks wishing to engage in bancassurance activity must submit an application to the Central Bank of Egypt (Supervision and Inspection Sector) to obtain its approval after fulfilling the controls and procedures set forth in the following decision and before contracting with the insurance company. In addition, banks engaged in bancassurance activity are obligated to regularize their status within a maximum period of three months from the date of its issuance, with notice to the Central Bank of Egypt to that effect.

1 Circular of the Supervision and Inspection Sector issued on September 17, 2003 2 Circular of the Governor of the Central Bank of Egypt issued on May 22, 2013

Article One (1) Method of Practice of Bancassurance Activity through Banks

-1 Marketing of insurance products issued by insurance companies licensed by the Financial Regulatory Authority (FRA) to practice the activity through banks operating in Egypt and registered with the Central Bank of Egypt.

-2 The bank is entitled to conclude agreements with insurance companies, with a maximum of one company for each of the following 4:

• Property insurance company - Commercial
• Property insurance company - Takaful
• Life insurance company - Commercial
• Life insurance company - Takaful Without permitting the combination of the commercial and Takaful forms for the same activity in the same branch.

Article Two (2) Controls and Procedures to be Followed for Banks to Practice Bancassurance Activity

Banks are obligated to adhere to the following controls and procedures as a minimum for practicing this activity: -1 Conducting a comprehensive study on the insurance company intended to be contracted with.

-2 Establishing the necessary policies and procedures to address all risks associated with this activity.

-3 Providing evidence that the company is registered with the Financial Regulatory Authority in a special register of companies licensed to practice bancassurance and that its products are approved by the Financial Regulatory Authority.

-4 Obtaining a letter issued by the Financial Regulatory Authority stating that there is no impediment to the company practicing this activity.

3 Circular of Mr. Nael, Governor of the Central Bank of Egypt, issued on March 28, 2016 4 Decision of the Board of Directors of the Central Bank of Egypt dated May 21, 2013 regarding controls of practice of banks bancassurance activity

-5 Confirming that bancassurance customers are fully aware that the bank is merely a marketing channel and is not responsible for the terms and conditions of the insurance products being marketed or for the amount of any compensation, and that liability for the foregoing rests solely with the insurance company, through the following:

a- Designating an independent place in each bank branch to promote and market insurance products through employees of the insurance company separately from banking products.

b- Clearly advertising that the insurance products being marketed are issued by the insurance company and not the bank.

c- All documents related to the insurance product must be on the printed materials of the insurance company alone, including marketing materials.

d- Obtaining a separate acknowledgment from the customer confirming that he is aware that the insurance product is under the sole responsibility of the insurance company and not the bank.

e- It is the sole responsibility of the insurance company to issue, renew, modify, and cancel insurance policies, and it bears all risks arising from the policy. The bank is not a party to the insurance policy issued and thus is not bound by any contracts or agreements between the customer and the company.

f- Obtaining an acknowledgment from the insurance company stating its full responsibility for resolving disputes and handling any complaints that may arise from offering the insurance product to customers.

-6 Confirming commitment to transparency when presenting insurance products to customers, through disclosing the terms of the products clearly, while leaving the customer free to choose the insurance company and the suitable insurance program without interference from the bank.

-7 Insurance products must be marketed through employees of the insurance company in accordance with the controls issued by the Financial Regulatory Authority.

-8 The "Controls of Banks Advertising and Promoting Insurance Products" issued by the Central Bank of Egypt by Circular of the Supervision and Inspection Sector dated September 17, 2003, shall remain in effect.

Article Three (3)

General Provisions of Contracting between the Bank and the Insurance Company In light of the general provisions stipulated upon contracting between the two parties, the contract signed between the bank and the insurance company must include as a minimum: -1 The insurance products intended to be marketed through the bank's branches.

-2 Commissions, fees, and the basis for their calculation.

-3 Commitment to account confidentiality and information related to customers.

-4 Mechanism for handling complaints received from customers.

-5 Mechanism for resolving disputes between the two parties, taking into account the acknowledgment required from the insurance company pursuant to Article Two, item 5 (f).

Article Four (4)

Banks wishing to engage in bancassurance activity must submit an application to the Central Bank of Egypt (Supervision and Inspection Sector) to obtain its approval after fulfilling the controls and procedures set forth in this decision and before contracting with the insurance company. Banks engaged in bancassurance activity must also regularize their status in accordance with the provisions of this decision within a maximum period of three months from its date, with notice to the Central Bank of Egypt to that effect.

Article Five (5)

The Central Bank of Egypt (Supervision and Inspection Sector) shall be notified in the event that the bank ceases this activity or changes the contracted insurance company.

Article Six (6)

Approval by Nael, Chairman of the Financial Regulatory Authority, shall be sought prior to notifying the Central Bank of Egypt, accompanied by evidence of the Authority's supervision and control over the windows of insurance companies operating in bank branches to obtain the approval of Nael, Governor of the Central Bank of Egypt.