Decision of the Chairman of the Authority No. 252 of 2019

General Authority for Financial Supervision
Chairman of the Authority

Decision No. (252) of 2019
Dated 4/4/2019

Chairman of the Board of Directors of the General Authority for Financial Supervision

Having reviewed Law No. 10 of 1981 on the issuance of the Law on Supervision and Control of Insurance in Egypt and its executive regulations and amendments; And Law No. 10 of 2009 on regulating supervision over markets and non-banking financial instruments; And Law No. 72 of 2007 on the issuance of the Law on Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transport Vehicles within the Arab Republic of Egypt; And the Compulsory Insurance Document for Civil Liability Arising from Accidents of Rapid Transport Vehicles within the Arab Republic of Egypt; And the minutes of the meeting of insurance companies that are members of the Egyptian Insurance Union dated 11/2/2019, approved by the President of the Union; And the draft Articles of Association of the Pool; And the memorandum of the Central Administration for Establishment and Licensing dated 24/2/2019 regarding this matter; And with the approval of Dr. Mohamed Omran, Chairman of the Board of Directors of the Authority.

Decided:

Article One: A pool named "The Compulsory Insurance Pool for Civil Liability Arising from Accidents of Rapid Transport Vehicles" is established, with its headquarters in Cairo, and it may establish branches within the Arab Republic of Egypt.

General Authority for Financial Supervision
Chairman of the Authority

Article Two: The Pool shall manage the compulsory insurance branch for rapid transport vehicles within the Arab Republic of Egypt on behalf of the Pool's members in accordance with the Pool's Articles of Association.

Article Three: The attached Articles of Association of the Pool are hereby approved.

Article Four: The Pool shall be registered in the register designated for it by the General Authority for Financial Supervision under number (8).

Article Five: This Decision and the Pool's Articles of Association shall be published in the Egyptian Official Gazette and on the Authority's website, and this Decision and the Articles shall take effect from the date of their issuance.

Chairman of the Board of Directors
General Authority for Financial Supervision
Dr. Mohamed Omran

Bylaws of the Egyptian Pool for Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transport Vehicles

Preamble

In accordance with the decision issued at the meeting of the Presidents and Authorized Members of insurance companies operating car insurance on vehicles in the Arab Republic of Egypt, held at the Egyptian Insurance Union on 11/2/2019, regarding the establishment of a pool named "The Egyptian Pool for Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transport Vehicles" among property and liability insurance companies and cooperative insurance associations operating in Egypt and licensed to conduct insurance business, including compulsory vehicle insurance.

The Pool is specialized in managing the compulsory insurance branch for rapid transport vehicles and compensating victims according to the conditions of the document issued in this regard, in addition to administrative and financial work related to organizing work in this field among Pool members, managing the joint account, and distributing each member's share in premiums, compensation, and costs.

It has been agreed that the provisions of the following articles shall be the Articles of Association of the Pool:

Chapter One
Membership – Objectives of the Pool.
Article (1) Establishment

A insurance pool named "The Egyptian Pool for Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transport Vehicles" in the Arab Republic of Egypt was established in accordance with the provisions of the Law on Supervision and Control of Insurance issued by Law No. 10 of 1981 and its executive regulations and amendments, and other laws in force, such that its actual operations begin after the issuance of the General Authority for Financial Supervision's decision establishing the Pool and registering it in the Pool Register of the Authority among insurance companies and cooperative insurance associations licensed by the Authority to issue compulsory vehicle insurance documents.

Every insurance company or cooperative insurance association licensed by the Authority to conduct compulsory vehicle insurance and related liability insurance is considered a member of the Pool upon its registration with the General Authority for Financial Supervision, and it must provide the Pool with its registration decision and the members of its board of directors. Insurance companies and cooperative insurance associations joining shall have no rights to the Pool's assets for the period prior to the date of joining, nor shall they bear any liabilities incurred by the Pool during that same period.

No insurance company or cooperative insurance association licensed to conduct compulsory vehicle insurance and related liability insurance may issue this type of document in any form outside the scope of the Pool.

Article (2) Investment of the Pool's Funds

The Pool does not aim to achieve profits nor does it bear any losses resulting directly from its operations, without prejudice to the Pool's right to invest funds available to it for the benefit of members.

Article (3) Headquarters

The Pool's headquarters is in Greater Cairo, and it may establish branches within the Arab Republic of Egypt.

Article (4) Objective of the Pool

The Pool directly, and on behalf of members, manages the compulsory insurance branch for rapid transport vehicles in accordance with the provisions of the Law on Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transport Vehicles within the Arab Republic of Egypt issued by Law No. 72 of 2007, and manages everything related to the insurance process for victims of accidents of rapid transport vehicles licensed to operate in the Arab Republic of Egypt in accordance with traffic law provisions, collects premiums for documents, prepares all financial records related to the accounting process, and pays

compensation to entitled parties in cases of death, bodily injuries leading to total or partial permanent disability, and material damages to third-party property (excluding vehicle damages), in accordance with the provisions stipulated in the compulsory insurance documents issued in this regard.

Article (5) Conducting Business.

The Pool takes all measures necessary to achieve its objectives to manage the insurance process on behalf of and for the account of members, and for this purpose it has:

Studying the technical bases for determining the fair premium and reviewing it periodically based on the data and statistics available to it, as well as the actual results of this type of insurance.
Managing the issuance of the unified compulsory insurance document for rapid transport vehicles approved by the General Authority for Financial Supervision for the benefit of members electronically, and collecting the premiums and fees due for it and the supplements related to this document, as well as supplements of insurance documents issued by insurance companies before the establishment of the Pool.
Creating and/or purchasing and/or leasing the necessary premises for issuing compulsory vehicle insurance documents, claims settlement work, and other tasks assigned to the Pool, and furnishing them with furniture, devices, equipment, and appropriate communication networks.
Examining and studying compensation requests submitted by victims, their heirs, or their agents to determine the compensation amounts due to entitled parties according to insurance coverage conditions.

Determining members' shares in paid and pending compensation and administrative expenses.
Preparing data and statistics on accidents resulting from the operation of rapid transport vehicles and cases of injuries and deaths from these accidents.
Withholding 25% of the net premium to cover compensation and other administrative expenses, and paying the remaining 75% of the net premium after deducting collection fees for documents whose issuance is managed by the Pool to members monthly, within seven working days of the following accounting month.
Surcharges on the net premium are paid by the Pool, which collected them, to the relevant authorities from the General Authority for Financial Supervision (6 per thousand supervision and control fees + 1 per thousand for insurance document approval and amendment services) and the Tax Authority (relative stamp duty for the client's share and the company's share) and the specific tax.
Preparing a financial center list and a joint account including premiums distributed by shares, minus amounts paid to members and expenses of all kinds and compensation, and in case a deficit is realized, all members are committed to paying the deficit within a maximum of 30 days from the date of notification, to be done in quarterly installments and notifying members.
Utilizing appropriate technical expertise to develop safety and security means that lead to reducing insured risks.

Article (6) "Distribution of Surplus and Covering Deficit"

If the Pool's operations result in a surplus, it is distributed among members according to their respective shares after setting aside a portion determined by the Pool to cover any deficit it may have.
In the event of a deficit in coverage results, members shall cover this deficit each according to their share.

Chapter Two
Pool Structure (General Assembly – Administrative Committee – Executive Director)
Article (7) General Assembly

The General Assembly of the Pool is its highest authority, and consists of the chairs of the boards of directors of member insurance companies and cooperative insurance associations or their deputies or authorized members, and the General Assembly is chaired by the President of the Egyptian Insurance Union or his deputy.

Article (8) "Competence of the General Assembly"

The General Assembly is competent with the following:

Setting the general policy of the Pool and plans that ensure achieving the objectives for which it was established and monitoring the implementation of these plans.
Proposing ratios for distributing compulsory vehicle insurance shares in the event of a new member joining, to be submitted to the Authority for approval.
Approving regulations drafted by the Administrative Committee.

Approving the estimated budget.
Approving the annual report on the Pool's activities.
Approving the balance sheet and annual final accounts based on the annual report.
Appointing the Executive Director and determining his salary and financial allowances.
Appointing the auditor and determining his fees, provided he is among the auditors registered in the Authority's records.
Electing members of the Pool's Administrative Committee.
Approving amendments to the Pool's Articles of Association.
Deciding on the dissolution of the Pool and issuing necessary decisions accordingly in accordance with the law's provisions.
Considering any other issues related to the Pool's activities.

Article (9) Meeting Deadlines

The General Assembly of the Pool meets at least once a year upon invitation from its president or upon request from half of its members or the Administrative Committee. The General Assembly meeting is not valid unless a simple majority (50%+1) of its members is present. Decisions are issued by a majority of the votes of attending members, except for decisions related to amending the Articles of Association, which are issued with the approval of three-quarters of the Pool's members. Each member of the Pool has one vote.

Without prejudice to the provisions of Law No. 10 of 1981 on the issuance of the Law on Supervision and Control of Insurance and its executive regulations, the Authority must be provided with the General Assembly minutes within thirty days for approval, and its decisions do not take effect until approved by the Authority.

Secondly, the Administrative Committee
Article (10)

The Pool shall have an Administrative Committee elected by the General Assembly, consisting of seven members representing member insurance companies and cooperative insurance associations, who must be among the chairs of the boards of directors of companies and cooperative insurance associations or their deputies or authorized members, or among holders of senior management positions in these companies and associations. The Administrative Committee shall elect a president from among its members, and its term is three years.

Members of the Administrative Committee are not entitled to receive any attendance allowances or bonuses.

Article (11) "Competences of the Administrative Committee"

Without prejudice to the competences of the General Assembly, the Administrative Committee is competent with the following:

Taking necessary decisions to achieve the Pool's objectives.
Approving the organizational structure of various departments as well as the functional structure of employees.

Approving systems and regulations related to financial, administrative, technical, and human resources affairs and their financial transactions for approval by the General Assembly.
Approving the annual report on the Pool's activities within one month from the end of the financial year, including a current account of member companies, the balance sheet, and the estimated budget.
Submitting a request to the President of the General Assembly to convene the Assembly.
Submitting any proposals to the General Assembly that help achieve the Pool's objectives.
Approving contracts concluded by the Pool to achieve its objectives, except for sales contracts affecting the Pool's assets, which require the General Assembly's approval.

Article (12) "Representation of the Pool"

The President of the Administrative Committee represents the Pool in its dealings with third parties and before administrative and judicial authorities.

Article (13) "Meeting Deadlines of the Administrative Committee"

The Administrative Committee meets at least once a month upon invitation from the Committee's president. The meeting is not valid unless a majority of Committee members are present, and Committee decisions are issued by a majority of attending votes. In case of a tie, the side on which the President is has precedence, and these decisions are communicated to General Assembly members.

Thirdly: The Executive Director
Article (14)

The Pool shall have an Executive Director appointed by a decision from the General Assembly, who manages the Pool's affairs through its technical, administrative, and financial bodies within the powers determined for him by the Administrative Committee. He attends General Assembly and Administrative Committee meetings but has no voting right in the decisions issued.

He is competent with the following:

Preparing a report on the Pool's work every three months or whenever requested by the Administrative Committee.
Preparing the annual report on the Pool's activities including a current account for members and the balance sheet.
Preparing the estimated budget for the Pool's expenses at least three months before the beginning of the financial year.
Preparing the structure of the Pool's departments as well as the organizational structure of its employees and approving it with the Administrative Committee.
Signing contracts and agreements needed by the Pool to conduct its business.

Preparing all necessary regulations and systems to conduct work in the Pool and approving them with the Administrative Committee and supervising their implementation.

Article (15) "Approval Powers"

The Executive Director of the Pool individually or with those designated by the President of the Administrative Committee from among managers has the right to sign individually or jointly on behalf of the Pool. As for payment orders, checks, and everything related to financial approval powers, it is in accordance with regulations approved by the Administrative Committee.

Chapter Three
Financial Affairs
Article (16)

The Pool's financial year begins with the beginning of the financial year of member insurance companies and cooperative insurance associations and ends with their end.

Article (17) "Bank Account"

One or more accounts are opened in the name of the Pool at any of the Egyptian banks registered with the Central Bank of Egypt, into which all Pool revenues are deposited and from which due compensation and amounts necessary for conducting the Pool's work are disbursed.

Article (18) "Supplements and Previous Compensation"

During the transitional period, insured parties may need to issue supplements to valid documents and those of insurance companies before the Pool's establishment. The Pool manages the issuance of these supplements, collects their value, and remits it to each insurance company separately. For this purpose, it may collect only issuance fees and does not bear any liabilities to victims or their heirs regarding these supplements.
Each member of the Pool is committed to bearing compensation due to him under documents he issued before the date of his joining the Pool.

Article (19) "Auditor"

The auditor registered in the Authority's auditor register oversees the annual audit of the Pool's accounts.

The General Administration for Audit Control of the Insurance Sector belonging to the Central Audit Organization also oversees the annual audit of the Pool's accounts. The Pool's management must place all records, documents, and data at the disposal of the auditor and the Central Audit Organization's auditors, and the report of each is presented to the General Assembly.

Chapter Four
General Provisions "Employees"
Article (20)

Priority in appointing employees to the Pool shall be given to current employees of insurance companies who have direct involvement with compulsory vehicle insurance departments.

Article (21) "Admitting New Members"

Every insurance company or cooperative insurance association licensed by the Authority to conduct compulsory vehicle insurance and related liability insurance after the Pool's establishment is considered a member upon its registration with the General Authority for Financial Supervision. It must provide the Pool with its registration decision and board of directors members and submit a written request to the Executive Director, who in turn presents this request within one month from the date of submission, along with all necessary documents, to the Pool's General Assembly to determine its share.

Article (22) "Withdrawal from Membership"

In the event that the General Authority for Financial Supervision cancels the license granted to any member of the Pool to conduct compulsory vehicle insurance or in the event of liquidating the activity of any member of the Pool,

the Executive Director must present the situation to the General Assembly to consider redistributing his share to other members as a result of his withdrawal from membership.

Any member may request to reduce his share in favor of other members (without specifying a particular member) to the extent that does not prejudice his obligations, including his joint liability up to the date of reduction, provided that this is at the end of the financial year preceding the approval and reduction of his share. The member must notify the Executive Director of his wish in writing at least three months before the end of the financial year to prepare for presenting his request to the Administrative Committee and then to the General Assembly to take a decision regarding it before the end of the financial year.

Article (23) "Dissolution of the Pool"

The Pool may not be voluntarily dissolved unless approved by the Pool's General Assembly in accordance with Article (8) of these Articles and with the consensus of all members, and after approval by the General Authority for Financial Supervision. The General Assembly appoints one or more liquidators entrusted with liquidating its assets and how to dispose of them under the supervision of the General Authority for Financial Supervision. In all cases, this does not prejudice the rights of insured parties and those dealing with the Pool.

Article (24) "Financial Provisions"

The Pool's funds and all its provisions are considered as credit balances for Pool members and are distributed among them in the event of the Pool's dissolution or the termination of the purpose of forming the provisions according to participation ratios, taking into account the accounts of founding members' rights and obligations.

Article (25) "Registration of the Pool with the General Authority for Financial Supervision"

The Pool is registered in the Pool Register of the General Authority for Financial Supervision after providing all data and documents requested by the Authority, and it acquires legal personality upon the issuance of its registration decision by the Authority and its registration in the Pool Register.

The Pool must indicate its special logo, registration number, and date with the General Authority for Financial Supervision on all documents, papers, and documents issued by it.

Article (26) Distribution of Shares

The shares of member companies in the Pool are distributed in the first formation according to the statement attached to the Articles.

It is within the power of the Pool's General Assembly to review the basis for distributing shares among members based on changes that occur in its composition upon the joining or withdrawal of any licensed member conducting compulsory vehicle insurance business, provided that the new basis is approved by the General Authority for Financial Supervision.

Article (27)
Mechanism for Reviewing the Distribution of Compulsory Insurance Shares to Pool Members

The mechanism for distributing compulsory vehicle insurance shares to Pool members is reviewed every two years by the Authority according to the controls and standards set by the Authority in this regard, and those shares are to be approved by the Authority.

Article (28) Status of the Government Fund
"To cover damages resulting from rapid transport accidents".

The government fund is financed at a rate of 3% of the Pool's premiums as currently practiced by companies pursuant to Ministerial Decision No. 219 dated 28/10/2009.
The Pool manages the payment of the deficit resulting from compensation to the government fund (if any) from the members' account.
Members remain responsible for paying their overdue premiums to the fund before the Pool's establishment, as well as compensation resulting from the fund's deficit during the period before its establishment.

Article (29) Status of the Orange Card

Egypt Insurance Company remains responsible for issuing and settling compensation for Orange Cards between Arab countries as a representative of the Egyptian market until it is reconsidered for the Pool to be responsible for managing the issuance and settlement of compensation for these cards. ---

Decision of the Chairman of the Authority No. 252 of 2019

Lineage: In force