Deputy Chairman of the Authority

Circular No. (5) for the Year 2019
Issued on 25/6/2019
Regarding Insurance Companies Accepting Insurance Operations via Tender

In the context of the Authority's efforts to ensure the safety and stability of non-banking financial markets and regulate them, and noting that some insurance companies are accepting insurance operations via tender and treating them as production, which contradicts the nature of such operations that are conducted directly through the insurance company's management, and therefore insurance brokerage plays no role in facilitating their conclusion.

In light of the provisions of the Law on Supervision and Control of Insurance in Egypt issued by Law No. 10 of 1981 and its executive regulations, and the Authority's Board of Directors Decision No. 23 of 2014 regarding the rules governing the practice of insurance and insurance brokerage activities within the Arab Republic of Egypt, the Authority emphasizes compliance with the following:

(1) All insurance operations contracted via tender must be conducted directly through the insurance company's management, and no production commissions shall be paid under any name. This is excepted for operations where it is proven that insurance brokerage plays a role in facilitating their conclusion, provided that documents supporting the broker's role in facilitating the insurance operation exist, along with the approval of the company's competent authority under its responsibility, and provided that there is no objection from the contracting party regarding the existence of insurance brokers, or that the contracting terms stipulate that dealings must be directly with the insurance company.

(2) Under no circumstances shall the production status of insurance operations accepted directly through the insurance company's management be converted into production operations, whether during the insurance period, upon renewal, or when making any amendments to those policies.

Deputy Chairman of the Authority
Advisor Rida Abdul Mu'ti

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036 www.FRA.gov.eg

Smart Village, Building No. B-136, Giza, Egypt Postal Code: 12577 Tel.: +202 35345350 - Fax: +202 35370036 info@fra.gov.eg