Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

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Decision No. 16 of 2019 of the Board of Directors of the Financial Regulatory Authority dated 7/2/2019 Issuing the Standard Collective Microfinance Insurance Contract Model for Covering Microfinance Beneficiaries

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Board of Directors of the Financial Regulatory Authority

Having reviewed Law No. 10 of 1981 on the issuance of the Law on Supervision and Control of Insurance in Egypt and its Executive Committee and amendments thereto, and Law No. 10 of 2009 concerning the regulation of supervision on non-banking financial markets and instruments, and Presidential Decree No. 192 of 2009 on the issuance of the Basic Statute of the Financial Regulatory Authority, and Decision No. 173 of 2014 of the Board of Directors regarding the rules and regulations for companies conducting microfinance activities, and Decision No. 31 of 2015 of the Board of Directors regarding the rules and standards for associations and civil society institutions conducting microfinance activities, and upon approval by the Board of Directors in its meeting held on 7/2/2019,

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Decided

(Article One)

Insurance companies wishing to cover microfinance beneficiaries from granting entities (Associations of Categories (A) and (B) / Institutions / Companies) are required to use the attached collective insurance contract and a monthly insurance premium capped at 30 piastres per thousand Egyptian pounds of the insured amount.

(Article Two)

The insurance premium shall be reviewed annually based on actual experience and through an actuarial study, and shall be approved by the Chairman of the Authority.

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(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 in the Egyptian Gazette.

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Chairman of the Board of Directors of the Authority Mohamed Omran

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Office of the Chairman of the Authority
Financial Regulatory Authority

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

Smart Village, Building B-136, Giza, Egypt
Postal Code: 12577
Tel.: +202 35345350 - Fax.: +202 35370036 info@fra.gov.eg

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Standard Collective Insurance Contract for Clients of

Microfinance Associations / Institutions / Companies

This contract is concluded between:

First:

..... First Party Details .....

Second:

"First Party – The Contractor"

Third:

..... Second Party Details .....

"Second Party – The Insurance Company"

And the parties have agreed as follows:

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Preamble

• Based on the "First Party's" request to contract with the "Second Party" to insure its clients for coverage of death and total permanent disability.
• To fulfill this request, the "Second Party" has agreed to conclude this insurance under the terms and benefits set forth in this contract.
• And after both parties acknowledged their legal capacity to contract and dispose of assets, they mutually agreed to conclude this contract according to the following provisions, rules, and conditions:

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Clause One

Contract Attachments

• The preamble above and the list of insured clients' data (including name, date of birth, national ID number, and outstanding loan balance (decreasing insured amount) for each insured, which serves as the basis for premium calculation) after being signed by the Contractor and approved by the insurance company, along with the Compact Disc (C.D.) containing this list's data, shall form an integral part of this contract.

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Clause Two

Effective Date

• This insurance shall be valid for one year starting from ----/--/-- and ending ----/--/--, and the contract shall be renewed for similar periods based on contract results and with the mutual consent of both parties.
• This contract shall take effect after notifying the Financial Regulatory Authority.

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Clause Three

Beneficiaries of Insurance Coverage

• This insurance covers all clients benefiting from financing from the Contractor, whose names and data are listed in the schedule referenced in Clause One, with an insured amount equal to the outstanding loan balance. It is required that the age at the start of insurance does not exceed 60 years.

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Clause Four

Insured Amount – Insurance Coverage – Underwriting Policy

Insured Amount:

• It is the outstanding microfinance loan balance owed by the insured to the Contractor, which is notified to the insurance company by the Contractor and on which the last monthly premium was paid to the insurance company.

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Insurance Coverage and Duration:

• Insurance coverage for each insured begins on the date specified in the data submitted by the Contractor to the insurance company and ends upon loan maturity.
• Coverage shall not apply to the insured life unless the Contractor submits data including the insured's name, national ID number, date of birth, insured amount, and coverage period, with the schedule indicating the Contractor's commitment to pay due premiums for the insureds within fifteen working days from the date of submitting the payment claim.

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Underwriting Policy:

• Insureds from the Contractor are accepted automatically without medical examination, with the Contractor obligated to include all microfinance recipients without exception in the periodic monthly list sent to the insurance company.
• The insurance company reserves the right to request proof of the mandatory contractual relationship between the Contractor and the eligible clients.

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Clause Five

Guaranteed Benefits

• In the event of the insured's death or total permanent disability for any reason, the insurance company commits to paying the Contractor an insured amount equal to the outstanding (remaining) balance of the microfinance loan.

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Clause Six

Exclusions

• A crime committed by the insurance beneficiary directly or indirectly.
• Nuclear radiation or chemical or biological contamination.
• Any pre-existing HIV/AIDS cases prior to the insurance start date.

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Clause Seven

Total Permanent Disability

• It is a condition where the insured suffers from a permanent, incurable total disability lasting at least six consecutive months without improvement, completely and permanently preventing the insured from continuing their occupation or any other work they can perform. The following cases are specifically considered covered total permanent disabilities under this insurance:
  • a – Total and incurable loss of sight in both eyes.
  • b – Complete and incurable paralysis of both arms or hands, or loss/amputation of both arms or hands.
  • c – Complete and incurable paralysis of both legs or feet, or loss/amputation of both legs or feet.
  • d – Complete and incurable paralysis of one arm and one leg, or one hand and one foot, or loss/amputation of one arm and one leg, or one hand and one foot.

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Clause Eight

Insurance Premiums

• Premiums for guaranteed benefits are calculated based on the total outstanding microfinance loan balances for members, applying a uniform rate of ____ piastres per thousand Egyptian pounds monthly, excluding all fees, stamps, service charges, and the policyholder guarantee fund approved by the Financial Regulatory Authority.
• This rate shall be reviewed at the end of each insurance year based on contract results, with the new rate to be agreed upon by both parties upon adjustment and subject to Authority approval.
• All current and future fees and taxes imposed on insurance premiums shall be borne by each party according to applicable laws and regulations.
• The Contractor must submit a monthly statement to the insurance company listing current, new, and departed insureds within fifteen working days from the first day of each month, including the outstanding loan balance for each insured and any additional insured amount, if applicable.
• The Contractor has the right to pay premiums within thirty days of the due date. In case of non-payment, the insurance shall be canceled, and the insurance company shall be entitled to a premium proportional to the coverage period up to the cancellation date.

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Clause Nine

Required Documents

1. A written claim request for policy benefits shall be submitted to the insurance company and delivered in person against a receipt signature, via fax, email with an attached registered letter, or any other method agreed upon between the insurance company and the Contractor.

2. The authorized entity or person submitting the claim for the Contractor's benefits shall submit this request along with supporting documents and all evidence required by the insurance company under this contract, within a period not exceeding six months from the date of the insured event giving rise to the claim.

3. The following documents shall be attached to the claim request for insurance benefits in case of the insured's death:

   • A certified photocopy of the insured's national ID card, certified by the Contractor.
   • The original death certificate issued by the competent authority, stating the cause of death, or a certified photocopy by the Contractor.
   • Any document or evidence necessary to prove the right to claim.
   • The insured's account statement from the loan start date until the date of death, showing the outstanding debit balance.

4. The following documents shall be attached to the claim request for insurance benefits in case of total permanent disability:

   • A certified photocopy of the insured's national ID card, certified by the Contractor.
   • A medical report from a facility agreed upon by both parties at the time of contracting, stating the cause of disability.
   • The insured's account statement from the loan start date until the date of total permanent disability, showing the outstanding debit balance.

5. The insurance company commits, upon receiving a claim and after receiving all required documents and verifying their authenticity, according to the timeline agreed upon by both parties, to pay the following:

   • The insurance company shall pay the outstanding loan balance to the Contractor upon claiming insurance benefits as specified in this policy, based on the last balance used for premium payment.
   • In cases where it is proven that the insured's loan balance at the time of death or disability is less than the paid insured amount, unless the insurance is invalid, the insurance company shall pay the difference to the insured, designated beneficiaries, or legal heirs according to inheritance laws.

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Clause Ten

Payment of Due Insurance Amounts

• The insurance company commits to paying due amounts under this contract directly to the Contractor, insured, or beneficiaries, as applicable, within a period not exceeding five working days from the date of submitting all documents specified in Clause Ten.

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Clause Eleven

Invalidity of Insurance

• The data submitted by the Contractor and all other documents provided to the insurance company were accepted in utmost good faith and form the basis for issuing this contract. Any material error in any insured's data, or if the provided information contains intentional fraud to mislead the company, shall result in the invalidation of insurance for the insured whose data contains this error.

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Clause Twelve

Jurisdiction

• Any dispute that may arise from the execution or interpretation of any clause of this contract shall fall under the jurisdiction of the competent Egyptian courts within the district of the "Second Party – The Insurance Company".

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Clause Thirteen

Contract Copies

• This contract is executed in two identical copies, with each party retaining one copy for implementation upon signing.

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Signatures

First Party
Second Party