Decision of the Board of Directors of the Financial Regulatory Authority No. (3) of 2019 dated 20/1/2019 regarding the Rules and Procedures for Selecting Insurance Companies' Representatives on the Board of Directors of the Policyholders and Beneficiaries Guarantee Fund at Insurance Companies

Board of Directors of the Financial Regulatory Authority

Having reviewed the Law on Joint Stock Companies, Companies Limited by Shares and Limited Liability Companies issued by Law No. (159) of 1981 and its executive regulations, the Law on Supervision and Control of Insurance in Egypt issued by Law No. 10 of 1981, the Law on Regulating Supervision of Non-Banking Financial Markets and Instruments issued by Law No. 10 of 2009, the Prime Minister's Decision No. 2734 of 2018 issuing the Basic Statute of the Policyholders and Beneficiaries Guarantee Fund at Insurance Companies, and upon approval by the Board of Directors of the Authority in its session held on 20/1/2019

Decided

Article 1

The selection of the members of the Board of Directors of the Policyholders and Beneficiaries Guarantee Fund at Insurance Companies (hereinafter referred to as the "Fund"), allocated to them under Article 14 of the Prime Minister's Decision No. (2731) of 2018, shall be by election in accordance with the rules and procedures set forth in the following articles.

Article 2

The conditions for a member company of the Fund entitled to participate in nominating a representative for its membership on the Fund's Board of Directors are as follows:

1. The company must have settled all its contributions or dues to the Fund according to the latest due date prior to the date of submitting the nomination request.
2. No administrative measures stipulated in Article (59) of Law No. 10 of 1981, taken in connection with its business activities, must have been issued against it, unless two years have elapsed since the issuance of the suspension or measure decision or the removal of the violation, whichever is sooner, except for the measure stipulated in clause (a) of that article.
3. The company must not be one for which the Fund has previously intervened to cover its obligations due to its failure to fulfill them within the specified deadlines, unless two years have elapsed since the date of the Fund's intervention to cover its obligations.
4. The company must not be one whose policies have been transferred or whose operations have been suspended.

The period referred to above shall be calculated from the date the deadline for receiving nomination requests closes. The conditions stipulated in clauses (3) and (1) of this article shall not apply to the formation of the Fund's first Board of Directors.

Article 3

A member company of the Fund, its subsidiaries, or companies member of the Fund subject to the actual control of a natural or legal person shall not submit more than one candidate for membership on the Fund's Board of Directors.

Article 4

The conditions for the natural person representing the member company of the Fund and submitting a nomination request are as follows:

1. He must be of good reputation and conduct.
2. He must not have previously been convicted of a criminal penalty or a liberty-restricting penalty for an offense involving honor or trust, or for any of the crimes stipulated in the Law on Joint Stock Companies, Companies Limited by Shares and Limited Liability Companies mentioned above, or in the laws regulating non-banking financial activities.
3. He must hold a higher degree from one of the Egyptian faculties or one of the foreign universities, with the degree recognized by the Supreme Council of Universities.
4. His experience in the field of insurance or one of the related sciences, or in one of the legal fields, must be at least fifteen years.
5. The candidate must be the Chairman of the Company's Board of Directors or a member of its Executive Management.

Article 5

The date for the commencement of receiving nomination requests shall be published at least one week prior to the specified nomination start date. The receipt of nomination requests shall continue for one week from the date of commencement of receiving requests, published in a widely circulated daily newspaper at the Fund's expense, and announced on the electronic website of both the Authority and the Fund (if a website is established).

Article 6

The nomination request shall be submitted to the Authority's Presidency Affairs Sector, signed by the Chairman of the Company's Board of Directors. The request shall be registered in a special log specifying the time and date of receipt, and the applicant shall be issued a receipt confirming submission. The nomination request shall be accompanied by the following:

• 1. A declaration confirming that the candidate meets the condition stipulated in clause (1) of Article 4, certified as a true copy.
• 2. A stamped copy from the candidate's employer of the academic certificate demonstrating compliance with the condition stipulated in clause (3) of Article 4.
• 3. A statement signed by the candidate detailing previous experience, specifying employers, nature of work, and time periods, in accordance with clause (4) of Article 4.
• 4. A commitment from the candidate not to hold simultaneous membership on the Fund's Board of Directors and the Egyptian Insurance Union's Board of Directors.
• 5. A certificate from the Fund confirming that the member company of the candidate meets the conditions stipulated in clauses (3) and (1) of Article 2.
• 6. A certificate from the Authority confirming that the member company nominating the candidate meets the condition stipulated in clause (4) of Article 2.
• 7. A declaration of the documents demonstrating that the candidate meets the conditions stipulated in clauses (5) and (4) of Article 4.

Article 7

A committee formed by a decision of the Authority's Chairman shall examine the nomination requests at the Authority, established for this purpose, on the day following the expiry of the deadline for receiving nomination requests, as follows:

1. Examining the nomination requests and verifying the compliance of the member company of the Fund and its candidate with the conditions, as well as reviewing company marks and identifying those lacking any of the conditions, within a period not exceeding five days from the date of expiry of the deadline for receiving nomination requests.
2. Notifying the nomination applicants, via the method determined by the committee, of the examination results within two working days from the date of expiry of the period referred to in clause 1.
3. Preparing a preliminary list of candidates, one for public companies in the life insurance business and the second for public companies in the property and liability insurance business, and publishing it on the electronic website of both the Authority and the Fund (if a website is established) within one working day from the date of expiry of the period referred to in clause 1 above.

Article 8

Each member company of the Fund meeting the nomination conditions has the right to appeal to the Authority's Chairman against the inclusion of any candidate in the lists of candidates for membership on the Fund's Board of Directors, within one week from the date of announcing the preliminary candidate lists stipulated in the preceding article. Likewise, any candidate excluded from nomination may appeal within the same period. All appeals shall be submitted to the Authority's Appeals Committee, which shall receive appeals within a period not exceeding two weeks from the date of expiry of the appeal deadline. Its decision shall be final and administratively enforceable, and the concerned parties shall be notified of the committee's decision within a maximum of one working day from the date of its issuance.

Article 9

The nomination examination committee referred to in Article 8 shall, within the next two working days following the date of the Appeals Committee's decision (if any) or the expiry of the appeal deadline, as applicable, prepare and publish the final lists of candidates for membership on the Fund's Board of Directors representing the member companies of the Fund, as follows:

1. The list of candidates for public companies in the life insurance business.
2. The list of candidates for public companies in the property and liability insurance business.
3. The aforementioned two lists shall be published, along with the venue and date of the election, on the electronic website of both the Authority and the Fund (if a website is established). The election shall be held within one week from the date of publication, as stated above.

Article 10

The conditions for the validity of the election and the Supervisory Committee for the Election are as follows:

1. Two members representing the Authority, one of whom shall be appointed as Chairman of the committee.
2. One member representing the Egyptian Insurance Companies Union.

Article 11

A committee to supervise the election shall be formed by a decision of the Authority's Chairman, as follows:

3. Two experienced members, one in the field of insurance affairs and the other in the field of law, selected by the Authority's Chairman.
4. This committee shall undertake the tasks of election preparation, attendance registration, and election verification as stipulated in Article 12 of this Decision regarding who is entitled to vote, supervise the integrity of voting and ballot submission after excluding invalid ballots, prepare a minutes report of the election and voting proceedings, tally the votes obtained by each candidate, and announce the results.

Article 12

The right to vote in the election shall be restricted to the Chairman of the Board of Directors of the member company of the Fund, who may delegate the authority to vote to the Company's Executive Member or one of its senior management officials, pursuant to a written authorization on the company's letterhead and stamped with the company seal.

Article 13

The conditions for the validity of voting require compliance with the following:

1. The ballot paper must include the lists stipulated in Article 9 of this Decision.
2. Voting shall be conducted by selecting two candidates: one representing public companies in the life insurance field, and the other representing public companies in the property and liability insurance business.

The Supervisory Committee for the Election shall announce the results after counting the valid votes obtained by each candidate on both lists, as follows:

(a) The candidate receiving the highest number of votes from the list referred to in clause (1) of Article 9. (b) The candidate receiving the highest number of votes from the list referred to in clause (2) of Article 9.

In all cases, if two candidates tie in the number of votes, a re-election shall be held between these two candidates on the same day as the election.

Article 14

Each candidate may appeal against the election results or procedures within one working day from the date of their announcement. The Appeals Committee referred to in Article 8 of this Decision shall have jurisdiction to rule on appeals against the election results or procedures in light of the rules and procedures set forth in this Decision, within a period not exceeding fifteen days from the date of submission. Its decision shall be final and enforceable.

Article 15

The final result of selecting the members of the Fund's Board of Directors from the representatives of public companies in the insurance field shall be announced on the day following the expiry of the period for ruling on the appeals referred to in the preceding article. In the absence of any appeals, the result shall be announced on the next working day following the expiry of the appeal submission period.

Article 16

In the event of the revocation of the license of the company represented by a member of the Fund's Board of Directors, the termination of the relationship between the company and its representative on the Board, or the loss of a Board member of any membership condition, their membership on the Fund's Board of Directors shall be forfeited. They shall be replaced by the next candidate in the vote count from the last election for the Board, and the term of membership shall be the remainder of their predecessor's term.

Article 17

This Decision shall be published in the Egyptian Gazette and on the electronic website of both the Authority and the Fund (if a website is established), and shall take effect from the day following its issuance. Competent authorities are tasked with its implementation.

Chairman of the Board of Directors of the Authority Dr. Mohamed Omran 46076