Decision of the Chairman of the Authority No. (698) of 2021

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

Decision No. (698) of 2021
Dated 5/5/2021

Chairman of the 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 regulations and amendments,

And Law No. 10 of 2009 on regulating supervision over non-banking financial markets and instruments,

And Minister of Interior Decision No. (676) of 2021 concerning the amendment of Decision No. 63 of 1959 on implementing certain provisions of Law No. 97 of 1959 regarding passports, by adding outbound travel care insurance as one of the documents required to obtain an Egyptian passport,

And the meeting of the Executive Council for Property and Liability Insurers at the Egyptian Insurance Union held on 6/4/2021,

And the draft bylaws of the Egyptian Pool for Outbound Travel Insurance,

And the memorandum prepared by the Establishment, Licensing and Professionals Supervision Sector on this matter.

Decided

Article 1: A pool named the Egyptian Pool for Outbound Travel Insurance is hereby established, with its headquarters in Cairo, and it may establish branches within the Arab Republic of Egypt.

Article 2: The Pool shall manage the outbound travel insurance branch on passports issued by the Ministers of Interior on behalf of the Pool's members, in accordance with the Pool's bylaws.

Article 3: The attached bylaws of the Pool are hereby approved.

---

Smart Village, Building 136-B, Giza, Egypt
Postal Code: 12577
Tel: 0202-35345350 - Fax: 0202-35370036 www.FRA.gov.eg

---

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

Article 4: The Pool shall be registered in the register maintained by the Financial Regulatory Authority under number (9).

Article 5: This Decision and the Pool's bylaws shall be published in the Official Gazette and on the Authority's website, and this Decision and the bylaws shall take effect from the date of their issuance.

Chairman of the Board of Directors of the Authority Dr. Mohamed Omran

---

Smart Village, Building 136-B, Giza, Egypt
Postal Code: 12577
Tel: 0202-35345350 - Fax: 0202-35370036 www.FRA.gov.eg

---

Bylaws of the
Egyptian Pool for Outbound Travel Insurance

---

Preamble

Pursuant to the decision issued at the meeting of the Executive Council for Property and Liability Insurers at the Egyptian Insurance Union on 14/2/2021 regarding the establishment of a pool named the (Egyptian Pool for Outbound Travel Insurance) among property and liability insurance companies and cooperative insurance associations operating in the Arab Republic of Egypt and licensed to conduct insurance business, including insurance against miscellaneous risks, which encompasses outbound travel insurance.

The Pool is specialized in managing outbound travel insurance and compensating the injured according to the terms of the policy issued for this purpose, in addition to the administrative and financial operations related to organizing work in this field among the Pool's members, managing the joint account, and distributing each member's share in premiums, compensation, and costs.

Accordingly, the founders have agreed that the provisions of the following articles shall constitute the Pool's bylaws:

(Chapter One)

Membership - Pool's Objectives

Article (1): Establishment

A insurance pool named the (Egyptian Pool for Outbound Travel Insurance) was established in the Arab Republic of Egypt 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 applicable laws, with the Pool commencing its actual operations after the issuance of the Financial Regulatory Authority's decision establishing it and registering it in the Insurance Pools Register of the Authority among companies and cooperative insurance associations licensed by the Authority to issue travel insurance policies.

Any insurance company or cooperative insurance association licensed by the Authority to conduct miscellaneous risks insurance shall be considered a member of the Pool upon its registration with the Financial Regulatory Authority, and it must provide the Pool with its registration decision and the names of its board of directors members.

The company or cooperative insurance association shall begin sharing risks from the date the General Assembly approves the company's or cooperative insurance association's share in the Pool. Affiliated companies and cooperative insurance associations shall have no rights to the Pool's assets for the period prior to the joining date, nor shall they bear any liabilities incurred by the Pool during that same period.

No insurance company or cooperative insurance association licensed to conduct travel insurance on passports issued by the Ministry of Interior shall issue this type of policy in any form outside the scope of the Pool.

This shall not prejudice the right of insured beneficiaries to conclude supplementary travel insurance policies with additional coverages with any of the insurance companies and associations licensed by the Authority to issue travel insurance policies.

Article (2): Investment of the Pool's Funds

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

Article (3): Headquarters

The Pool's headquarters is in Greater Cairo.

Article (4): Pool's Objective

The Pool shall directly and on behalf of the members manage travel insurance policies for holders of passports issued by the Ministry of Interior, and manage all matters related to the insurance process, in accordance with the terms, conditions, and exclusions of the travel insurance policy, collect premiums for the policies, prepare all financial records related to the accounting process, manage and pay compensation to entitled parties, and prepare account statements for the Pool's members.

Article (5): Conducting Operations

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

1. Determine the total premium for the insurance policy at 300 EGP (three hundred Egyptian pounds), and the Pool may review it periodically based on technical and actuarial studies prepared by the Pool's Administrative Committee for this purpose and presented to the General Assembly, and no modification shall be implemented except after obtaining the opinion of the Ministry of Interior and the Authority's approval.
2. Manage and issue the travel insurance policy approved by the Financial Regulatory Authority electronically for the benefit of the members, and collect the due premiums and fees.
3. Establish and/or purchase and/or lease the necessary premises for issuing travel insurance policies, managing and settling claims, and other operations assigned to the Pool, and furnish them with appropriate furniture, equipment, and communication networks.
4. Examine and study claims submitted by the injured, their heirs, their agents, or healthcare program management companies to determine the compensation amounts payable to entitled parties according to the insurance coverage terms.
5. Determine members' shares in paid and pending compensation and administrative expenses.
6. Prepare data and statistics related to accidents arising from this type of insurance.
7. The Pool shall retain 25% of net insurance premiums to cover compensation and other administrative expenses, after deducting 25% as collection expenses.
   Surcharges on the net premium shall be paid by the Pool, which collected them, to the authorities designated by the Financial Regulatory Authority (6 per thousand for supervision and control fees + 1 per thousand for policy approval and amendment services + 2 per thousand of total direct premiums representing the portion allocated to the Policyholders' Rights Protection Fund, the Tax Authority, and the Stamp Duty Authority (proportional stamp duty: client's share and company's share) and the specific tax.
8. Prepare a financial center list and joint account including premiums distributed according to shares, minus amounts paid to members and expenses of all kinds and compensation. In case of a deficit, all members are obligated to cover the deficit within a maximum of (30 days) from the date of notification, to be paid in quarterly installments and reported to the members.
9. The Pool has the right to enter into reinsurance agreements with companies approved by the Financial Regulatory Authority.
10. The Pool has the right to enter into agreements with healthcare companies (TPA) to provide assistance, services, and follow up on subscribers' compensation abroad if necessary.

Article (6): Distribution of Surplus and Covering Deficit

If the Pool's operations result in a surplus, it shall be distributed among the members according to their respective shares, after setting aside a portion determined by the General Assembly to cover any potential deficit.

In case of a deficit in coverage results, members shall cover this deficit according to their respective shares.

(Chapter Two)

Pool's Structure
(General Assembly - Administrative Committee - Executive Director)

First: The General Assembly:

Article (7)
The General Assembly of the Pool is its supreme authority, and it consists of the chairmen of the boards of directors of the member insurance companies and cooperative insurance associations, or their deputies or appointed members, and the General Assembly shall be chaired by the Chairman of the Egyptian Insurance Union or his deputy.

Article (8): General Assembly's Competencies

The General Assembly shall be competent for the following:

1. Formulating the Pool's general policy and plans ensuring the achievement of its establishment objectives and monitoring the implementation of these plans.
2. Proposing ratios for redistributing travel insurance shares in case a new member joins, a member withdraws, or its share is reduced, subject to submission to the Authority for approval.
3. Distributing shares among founding members.
4. Approving regulations drafted by the Administrative Committee.
5. Approving the estimated budget.
6. Approving the annual report on the Pool's activities.
7. Approving the annual balance sheet and final accounts based on the annual report.
8. Appointing the Executive Director and determining his salary and financial allowances.
9. Appointing the auditor and determining his fees, provided he is among the auditors registered with the Authority's records.
10. Electing members of the Pool's Administrative Committee.
11. Approving amendments to the Pool's bylaws and submitting them to the Financial Regulatory Authority for approval.
12. Resolving the dissolution of the Pool and issuing necessary decisions in accordance with the law.
13. Considering any other matters related to the Pool's activities.

Article (9): Meeting Schedules

The General Assembly of the Pool shall convene at least once a year upon invitation from its chairman or upon request from half of its members or the Administrative Committee. A General Assembly meeting shall not be valid unless a simple majority (50%+1) of its members are present. Decisions shall be issued by a majority of the votes of attending members, except for decisions related to amending the bylaws, which shall be issued with the approval of three-quarters of the Pool's members.

Each member of the Pool shall have 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's minutes within thirty days for approval, and its decisions shall not take effect until approved by the Authority.

Second: The Administrative Committee:

Article (10)
The Pool shall have an Administrative Committee elected by the General Assembly, consisting of seven members representing the member insurance companies and cooperative insurance associations, who must be among the chairmen of the boards of directors of the companies and associations, their deputies, appointed members, or senior management executives of these companies and associations. The Administrative Committee shall elect a chairman, and its term shall be three years.

Article (11): Administrative Committee's Competencies

Without prejudice to the General Assembly's competencies, the Administrative Committee shall be competent for the following:

1. Taking necessary decisions to achieve the Pool's objectives.
2. Approving the organizational structure of various departments and the functional structure of employees.
3. Approving systems and regulations related to financial, administrative, technical, and human resources matters and their financial transactions for approval by the General Assembly.
4. Approving the annual report on the Pool's activities within two months from the end of the financial year, including a current account for member companies, a balance sheet, and an estimated budget.
5. Submitting a request to the General Assembly chairman to convene the General Assembly.
6. Submitting any proposals to the General Assembly to help achieve the Pool's objectives.
7. Approving contracts concluded by the Pool to achieve its objectives, except for sale contracts affecting the Pool's assets, which require General Assembly approval. The General Assembly may delegate the Administrative Committee or its chairman to dispose of assets as it deems appropriate.

Article (12): Representing the Pool

The Chairman of the Administrative Committee represents the Pool in its dealings with third parties and before administrative and judicial authorities, and he may delegate the Executive Director or his deputy for some of these dealings.

Article (13): Administrative Committee Meeting Schedules

The Administrative Committee shall meet at least once a month upon invitation from the Committee chairman. A meeting shall not be valid unless a majority of Committee members are present. The Committee's decisions shall be issued by a majority of attending votes, and in case of a tie, the Chairman's side shall prevail. These decisions shall be communicated to General Assembly members within fifteen days from the date of issuance.

Third: The Executive Director:

Article (14)
The Pool shall have an Executive Director appointed by a decision from the General Assembly, who shall manage the Pool's affairs through its technical, administrative, and financial departments within the powers determined by the Administrative Committee. He shall attend General Assembly and Administrative Committee meetings but shall not have a voting right in the decisions issued.

He shall be competent for the following:

1. Preparing a report on the Pool's operations every three months or whenever requested by the Administrative Committee.
2. Preparing the annual report on the Pool's activities including a current account for members and a balance sheet.
3. Preparing the estimated budget for the Pool's expenses at least three months before the beginning of the financial year.
4. Preparing the organizational structure of the Pool's departments and its employees and obtaining approval from the Administrative Committee.
5. Signing contracts and agreements required by the Pool to conduct its operations, after approval by the Administrative Committee.
6. Preparing all necessary regulations and systems to manage the Pool's work and obtaining approval from the Administrative Committee and supervising their implementation.

Article (15): Signing Authority

Each of the Executive Director of the Pool individually or with a manager designated by the Administrative Committee chairman shall have the right to sign individually or jointly on behalf of the Pool. As for payment authorizations, checks, and all matters related to financial signing authorities, they shall be 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 the member insurance companies and cooperative insurance associations and ends with theirs.

Article (17): Bank Account

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

Article (18): Prior Compensation

Each member of the Pool is obligated to bear the compensation due to him under the policies he issued before the date of his joining the Pool.

Article (19): Auditor

One of the auditors registered in the Authority's auditors' register shall audit the Pool's accounts annually.

The General Administration for Auditing the Insurance Sector of the Central Audit Organization shall also audit the Pool's accounts annually. The Pool's management shall place all records, documents, and data at the disposal of the auditor and the Central Audit Organization's auditors, and each of their reports shall be presented to the General Assembly.

(Chapter Four)

Admission of New Members

Article (20)
Any insurance company or cooperative insurance association licensed by the Authority to conduct miscellaneous risks insurance after the Pool's establishment shall be considered a member upon its registration with the Financial Regulatory Authority. It must provide the Pool with its registration decision and board of directors members, which the Pool shall present to the Administrative Committee chairman. The chairman shall, in turn, present this request within one month from its submission and after completing all required documents to the General Assembly to determine its share. The actual subscription shall begin after the General Assembly's approval by the Financial Regulatory Authority.

Article (21)
Withdrawal from Membership

If the Financial Regulatory Authority cancels, suspends, or revokes the license granted to any Pool member to conduct miscellaneous risks insurance, or in case of liquidating any member's activities, the Administrative Committee chairman must present the situation to the General Assembly to consider redistributing this member's share to the remaining members.

Any member may request to reduce their share in favor of the remaining members without specifying a particular member, without prejudice to their obligations, including joint liability, up to the date of reduction. This shall take effect at the end of the financial year preceding the approval to reduce their share. The member must notify the Administrative Committee chairman in writing at least three months before the end of the financial year to prepare for presenting their request to the Administrative Committee and then to the General Assembly to make a decision before the end of the financial year.

Article (22)
Dissolution of the Pool

The Pool shall not be voluntarily dissolved unless approved by the General Assembly in accordance with Clause (11) of Article (8) of these bylaws, with the unanimous consent of all members, and after approval by the Financial Regulatory Authority. In this case, the General Assembly shall appoint one or more liquidators entrusted with liquidating its assets and determining how to dispose of them under the supervision of the Financial Regulatory Authority. In all cases, this shall not prejudice the rights of insured parties and those dealing with the Pool.

Article (23)
Financial Provisions

The Pool's funds and all its provisions from credit balances belong to the Pool's members and shall be distributed among them in case of the Pool's dissolution or the completion of the purpose for which the provisions were established, according to participation ratios, taking into account the rights and obligations of founding members.

Article (24)
Registration of the Pool with the Financial Regulatory Authority

The Pool shall be registered in the Insurance Pools Register of the Financial Regulatory Authority after submitting all data and documents requested by the Authority, and it shall acquire legal personality upon the issuance of its registration decision by the Authority and its registration in the Insurance Pools Register.

The Pool must indicate its special logo, registration number, and date with the Financial Regulatory Authority on all documents and policies it issues.

Article (25)
Coordination Committee

A committee comprising the Chairman of the Administrative Committee of the Pool and a representative from each of the following shall be formed:

• Ministry of Interior (Passports and Immigration Authority).
• Financial Regulatory Authority.
• Egyptian Insurance Union.

The Committee shall be competent to review matters requiring coordination between the concerned authorities and parties, and any matters related to the practical implementation mechanism of the Pool's work.

Article (26)
Distribution of Shares

The shares of the founding companies of the Pool shall be distributed according to the table attached to the bylaws.

It shall be within the General Assembly's authority to review the basis for distributing shares among members in light of amendments to its composition when any licensed travel insurance company joins or leaves, provided the new basis is approved by the Financial Regulatory Authority.

Article (27)
Mechanism for Reviewing Share Distribution Outbound Travel Insurance on Pool Members

The mechanism for distributing outbound travel insurance shares among Pool members shall be reviewed every two years by the Authority according to the controls and standards it establishes for this purpose, subject to the Authority's approval of those shares.

---

Sample Share Distribution
Insurance Companies Members of the Egyptian Pool for Travel Insurance

No.	Insurance Company Name	Company Share %
1	Allianz Insurance Company - Egypt	16.515
2	AIG Egypt Insurance Company	13.062
3	Orient Takaful Insurance Company - Egypt	8.574
4	Egypt Insurance Company	8.099
5	Delta Insurance Company	6.904
6	Wathiq Takaful Insurance Company - Egypt	5.422
7	GIG Egypt Insurance Company	4.173
8	Egyptian Saudi Family Insurance Company	4.005
9	Egyptian Takaful Insurance Company for Property and Liability	3.996
10	Royal Insurance Company	2.168
11	Suez Canal Insurance Company	2.082
12	Chubb Insurance Egypt	2.000
13	Egyptian Cooperative Insurance Association	2.000
14	Al Mohandes Insurance Company	2.000
15	Egypt Takaful Insurance Company - Property and Liability	2.000
16	Tokyo Marine Egypt General Takaful	2.000
17	Arab Insurance Company for Property and Liability - Egypt	2.000
18	Eskan Insurance Company	2.000
19	AXA Egypt Insurance Company	2.000
20	Tharwa Insurance Company	2.000
21	National Insurance Company	5.000
22	Madly Insurance Company	2.000
	Total	100

Basis for Share Distribution:
(1) A relative weight is calculated for each company at 90% of the average direct premiums for travel policies over the last five financial years (June 2016 - June 2020) and 10% of shareholders' equity for the last financial year (June 2020).
(2) A share of 5% is determined for National Insurance Company for its efforts in this project.
(3) A minimum share of 2% is determined for all companies licensed by the Authority to issue travel insurance policies (as one of the miscellaneous risks branch policies).
(4) A minimum share of 1% is determined for companies that have not issued travel insurance policies.
(5) The average direct premiums for travel insurance policies over the last five years (June 2016 - June 2020) are considered the basis for preparing the share distribution sample.

---

Office of the Deputy Chairman
Financial Regulatory Authority
Incoming No.: 4216
Date: 5/5/2021

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Memorandum

Date: 5/5/2021

To: Mr. Advisor / Reda Abdel Moeity - Deputy Chairman of the Authority From: Supervisor of the Establishment and Licensing Sector Head of the Central Administration for Insurance Companies Supervision

Subject	Memorandum regarding the establishment of the Egyptian Pool for Outbound Travel Insurance
Requested	Information	Approval	Execution	Opinion	√

In light of the meeting of the Executive Council for Property and Liability Insurers at the Egyptian Insurance Union held on 6/4/2021, at which it was decided to approve the establishment of a pool for outbound travel insurance to issue and settle claims according to the bylaws of the pool to be issued after incorporating the Authority's observations.

In this regard, we have the honor to attach a detailed memorandum regarding the establishment of the Egyptian Pool for Outbound Travel Insurance, along with the final form of the Pool's bylaws and the attached Authority Decision on this matter, in implementation of Article (92) of the Executive Regulations of Law No. 10 of 1981.

Therefore, the matter is submitted to your Excellency for review, and in case of approval, kindly submit it to Dr. Mohamed Omran, Chairman of the Authority, to approve the attached Decision.

Please accept our highest regards,

Head of the Central Administration
for Insurance Companies Supervision
(Dr. Mahmoud Samaha)

Supervisor of
Establishment, Licensing and
Professionals Supervision Sector
(Diaa Reda)

---

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Memorandum

Date: 5/5/2021

To: Dr. Mohamed Omran - Chairman of the Authority From: Advisor / Reda Abdel Moeity - Deputy Chairman of the Authority

Subject	Memorandum regarding the review of the establishment of the Egyptian Pool for Outbound Travel Insurance
Requested	Information	Approval	Execution	Opinion	√

Introduction:
In line with the state's commitment to protecting its citizens by providing an insurance protection umbrella against various risks that may befall them while traveling abroad, especially given that many countries refuse to issue travel visas unless the traveler has insurance coverage.

Accordingly, the state, represented by the Ministry of Interior as the authority responsible for issuing passports to citizens, deemed that issuing these passports should be coupled with insurance coverage against risks that citizens may face while abroad. This led to the issuance of Minister of Interior Decision No. (676) of 2021 amending Decision No. 63 of 1959 on implementing certain provisions of Law No. 97 of 1959 regarding passports, by adding outbound travel care insurance as a document required to obtain an Egyptian passport.

Since insurance companies and Egyptian insurance associations are the only entities licensed to conduct insurance business within the Arab Republic of Egypt under the supervision and control of the Authority in accordance with Law No. 10 of 1981.

With the Authority and all companies recognizing this national role, discussions among the chairmen and appointed members of insurance companies conducting travel insurance, after coordination with the Authority, led to the meeting of the Executive Council for Property and Liability Insurers at the Egyptian Insurance Union held on 6/4/2021.

The meeting resulted in a decision approving the establishment of a travel insurance pool among themselves to manage the issuance of travel insurance policies on passports issued by the Ministry of Interior and manage the settlement of resulting claims, according to the terms of the specialized insurance policy whose terms and coverages were approved by the Authority, as well as finalizing the draft bylaws of the Pool after incorporating the Authority's observations.

Legal Framework:
Article (4) of Law No. 10 of 2009 on regulating supervision over non-banking financial markets and instruments states:
"The Authority works to ensure the safety and stability of non-banking financial markets, regulate and develop them, and balance the rights of participants therein. It also provides means, systems, and issues rules ensuring the efficiency of these markets and transparency of activities conducted therein. To achieve its objectives, the Authority shall, in particular:

1. License the conduct of non-banking financial activities.
2. .....
3. .....
4. .....
5. Protect the rights of participants in non-banking financial markets and take necessary measures to limit manipulation and fraud in these markets, while considering the commercial risks involved in dealing therein."

Article (91) of the Executive Regulations of Law No. 10 of 1981 also states:
"Insurance and reinsurance companies and cooperative insurance associations may establish among themselves one or more pools to manage a branch of insurance or a specific process on their behalf according to each pool's bylaws."

Article (92) of the same regulations states:
"The founding members of the pool shall draft its bylaws. A decision from the Chairman of the Board of Directors of the Authority shall be issued to establish the pool and approve its bylaws. The pool shall be registered in a special register with the Authority and shall acquire legal personality from the date of this registration. The Authority must be notified of any amendments to the bylaws and the reasons for such amendments."

Authority's Technical Opinion:
After studying the submitted draft bylaws and after the Egyptian Insurance Union incorporated all the Authority's observations, the technical opinion concluded with approval of the bylaws in their final form to prepare for their approval and registration of the Pool in the Insurance Pools Register of the Authority.

In implementation of Article (92) of the Executive Regulations of Law No. 10 of 1981 mentioned above, it is required to issue a decision from the Chairman of the Board of Directors of the Authority to establish the outbound travel insurance pool.

Opinion:
In light of the above, and subject to your approval, kindly approve the attached Decision regarding the establishment of the Egyptian Pool for Outbound Travel Insurance and approve its bylaws to prepare for its registration in the Insurance Pools Register of the Authority.

The matter is submitted,,,

Deputy Chairman of the Authority
Advisor / Reda Abdel Moeity