Regulatory Alerts2020-01-01
Board of Directors Decision No. 53 of 2020
The Financial Regulatory Authority of Egypt issued Board of Directors Decision No. 53 of 2020 to formally classify Takaful (Islamic insurance) as a distinct activity from traditional commercial insurance under Article 40 of Law No. 10 of 1981. This regulatory clarification explicitly permits joint-stock commercial insurance companies to invest in the capital of Takaful insurance companies, thereby overriding the previous prohibition on cross-investment within the sector. The decision establishes the legal framework for capital participation between conventional and Islamic insurance entities while preserving the Authority's supervisory oversight.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Decision No. (53) of 2020 dated 2020/3/22
Considering that Takaful (Islamic insurance) constitutes a distinct activity from traditional commercial insurance within the meaning of Article (40) of
Law No. 10 of 1981 on Supervision and Control of Insurance in Egypt
Whereas Article (40) of Law No. 10 of 1981 on Supervision and Control of Insurance in Egypt stipulates that:
"A joint-stock insurance company shall not be permitted to invest in the capital of another insurance company engaged in the same activity in Egypt"
And since Takaful is considered a distinct activity in its nature and method of practice compared to traditional commercial insurance, it is therefore
permissible for commercial insurance companies to invest in the capital of Takaful insurance companies, with all the resulting implications.
Chairman of the Board of Directors of the Authority
Dr. Mohamed Omran
Smart Village, Building 137, Giza, Egypt Postal Code: 110 Telephone: +203 2524750 Fax: +203 2527006 WWW.FRA.GOV.EG
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