Minister of Investment Decision No. 50 of 2005 Amending Certain Provisions of the Executive Regulations of Law No. 54 of 1975 on Special Insurance Funds

Egyptian Gazette - No. 50 on March 6, 2005

Ministry of Investment

Decision No. 50 of 2005

Amending Certain Provisions of the Executive Regulations of Law No. 54 of 1975 Concerning Special Insurance Funds

Minister of Investment

After reviewing the Law on Special Insurance Funds issued by Law No. 54 of 1975;

And the Law on Supervision and Control of Insurance in Egypt issued by Law No. 10 of 1981;

And the Decision of the Minister of Economy and Economic Cooperation No. 78 of 1977 issuing the Executive Regulations of the Law on Special Insurance Funds, and the regulations attached thereto;

And after reviewing the sessions of the Board of Directors of the Egyptian Insurance Authority No. 138 and 139, held on June 27, 2004, and October 12, 2004;

And on the proposal of the Chairman of the Egyptian Insurance Authority;

And based on the opinion of the Council of State;

Decided:

(Article One)

The text of Article (2) of the Decision of the Minister of Economy and Economic Cooperation No. 78 of 1977 issuing the Executive Regulations of the aforementioned Law on Special Insurance Funds is replaced with the following:

(For the purpose of applying the provisions of the attached Executive Regulations, the term "the Authority" refers to "the Egyptian Insurance Authority").

(Article Two)

The texts of Articles (1, 4, 5, 6, 9, 10, 11), Item (8), and Items (14, 15, 16, 17, 19, 20) of the Executive Regulations of the aforementioned Law on Special Insurance Funds are replaced with the following:

Article 1 - The basic statute of a special insurance fund must include the following provisions:

1. The name of the fund and the address of its headquarters.
2. The purpose of its establishment.
3. The date of the fund's establishment / date of benefit calculation and contribution collection / date of registration.
4. Definition and determination of contribution rates for collecting contributions and paying insurance benefits.
5. Conditions for joining the fund's membership and the maximum age for joining - Determination of the joining fee and annual contributions - Determination of the maximum age for joining.
6. Definition of the founding member.
7. Circumstances under which membership ceases, namely:
   (a) Reaching retirement age.
   (b) Death.
   (c) Permanent disability (partial / total).
   (d) Transfer (compulsory / voluntary).
   (e) Resignation from service.
   (f) Dismissal from service.
   (g) Early retirement.
   (h) Resignation or withdrawal from the fund.
   (i) Expulsion from the fund.
8. Handling of employees' cases:

• Those whose services end due to permanent disability (total / partial).
• Those who are compulsorily transferred or voluntarily move to other employers.
• Those who suffer from or receive unpaid leave.

9. Handling cases where membership is reinstated, and specifying members' rights and obligations in these cases.
10. Stating the rules and procedures governing collective exit cases, regardless of the cause. For example: collective exit due to early retirement, mass withdrawals, mass resignations, or health disability.
11. Determining penalties for members violating the fund's basic statute, particularly regarding delays in or cessation of contribution payments.
12. Contribution schedules and their due dates.
13. Specified financial benefits, compensations, and pensions that the fund commits to paying, and their due dates.
14. Determination of the fund's financial resources, upon which actuarial studies are based.
15. Rules for investing the fund's funds.
16. The maximum percentage allocated from the fund's resources to administrative expenses.
17. Rules regarding the formation of the board of directors and its competencies.
18. Rules regarding convening the general assembly in ordinary or extraordinary meetings, the decisions it is authorized to issue, and the procedures and conditions followed therein.
19. Procedures and conditions for amending the fund's basic statute.
20. Rules and procedures for appointing fund management staff and defining their scope of authority.
21. Rules and procedures for appointing auditors and determining their remuneration.
22. Circumstances, rules, and procedures for merging the fund into another fund, dissolving it, or liquidating it, and how to dispose of its funds upon dissolution or liquidation.

Article 4 - A registration fee of fifteen Egyptian pounds shall be paid to the Authority via a payable check or postal money order. The amount determined by the Authority for publishing the registration decision in the Egyptian Gazette shall also be paid by the same method.

Article 5 - The Authority shall rule on the registration request within (thirty days) from the date of completing all required documents. The fund's registration decision shall be issued and its data recorded in the registry established for this purpose within (thirty days) from the date of ruling on the registration request. This decision shall be published in the Egyptian Gazette at the fund's expense.

Article 6 - In case of rejection of the fund's registration, the fund's representative shall be notified in writing of the reasons for rejection within fifteen days from the expiration of the deadline for ruling on the registration request. All documents and papers and amounts paid for publication expenses shall be returned to him, except for Form No. (1 Funds).

Article 7 - Registration data may be amended with the Authority's approval based on a resolution by the fund's general assembly, by a majority of attending votes, and in accordance with the actuarial study prepared for this purpose, via a request on Form (2 Funds). These amendments shall be published in the Egyptian Gazette at the fund's expense and shall take effect from the day following their publication date.

Article 9 - The annual supervision and control fee stipulated in Article (9) of the aforementioned Law on Special Insurance Funds shall be paid according to Form No. (3 Funds) by the end of the third month following the end of the fund's fiscal year. This fee shall be recorded in a special register maintained by the Authority.

Article 10 - The contributions on which the supervision and control fee is calculated include the following:
(a) The value of contributions for the previous year, up to December 31 of this year.
(b) The value of the employer's contribution, to which the fund's members belong, to the fund's resources.

Article 11 - Item (8) Members' Loans Register:
Article 11 - Items Two and Three:
The fund's accounting system may be developed using automated accounting systems for certain registers.

Article 14 - The funds of special insurance funds shall be invested in the following investment channels:

1. At least for purchasing government or guaranteed securities.
2. At most in negotiable bonds in the securities market (10%).
   It is required that the value of investments in bonds issued by a single entity does not exceed (5%) of the total fund assets or (20%) of the issuing entity's capital.
3. At most in negotiable shares in the securities market or investment fund documents, provided that the value of investments in shares issued by a single entity does not exceed (5%) of the total fund assets or (20%) of the issuing entity's capital.
4. The total value of investments in bonds, shares, and investment fund documents issued by a single entity shall not exceed (10%) of the fund's assets.
5. At most in owning existing real estate within the country, provided that the value of any real estate does not exceed (3%) of the total fund assets and with the Authority's approval.
6. At most for granting cash or in-kind loans, not exceeding (75%) of the insurance benefit entitlements due to the member upon resignation at the time of loan approval.
7. Cash deposits and savings certificates in local or foreign currency deposited at banks registered with the Central Bank of Egypt, provided that total deposits at any single bank do not exceed (25%) of the total fund assets.
8. At most in other investments consistent with the purposes for which the funds were established, provided they are approved by the Authority.

Article 15 - The fund is obligated to provide a certificate from the bank(s) where fixed cash deposits and securities are held to the Authority, stating these deposits and securities, with an acknowledgment that the fund is not permitted to withdraw from them or transfer them to any other investments except with the Authority's permission and within the period specified by it.

Article 16 - The fund shall be managed during the establishment and registration period by an interim board of directors chosen by the founders from among themselves. This board shall continue managing the fund's affairs for a maximum of one year or until the first general assembly is convened, whichever is earlier.

Article 17 - The general assembly shall elect the fund's board of directors from among its members. The fund's basic statute may stipulate:
(a) The election of all board members by the general assembly, in case the entity establishing the fund does not contribute to its resources. As an exception to this, that entity may, with the Authority's approval, appoint a number of board members not exceeding one-third if the fund's circumstances require it, not exceeding one-third of the total members of this board.

Article 19 - In case of the dissolution of the fund's board of directors pursuant to Article (29) of the Law on Special Insurance Funds, the Authority's board of directors shall issue a decision appointing an interim board of directors of at least five members, based on a nomination by the employer to which the fund belongs, provided that none of the members are from the previously dissolved board. The Egyptian Insurance Authority may appoint two of its own members to this board. The interim board shall exercise its competencies for a maximum of one year from the date of the appointment decision or until the extraordinary general assembly is held to elect a new board of directors, whichever is earlier.

Article 20 - The liquidation of the fund may be requested after approval by the general assembly by the majority stipulated in Article (21) of the Law on Special Insurance Funds. The Authority may also issue a decision to liquidate the fund and cancel its registration in the cases and following the procedures stipulated in Article (31) of the aforementioned Law. The Authority's board of directors shall issue a decision appointing a liquidation committee of three members, ensuring the decision specifies the percentage of liquidation expenses and the duration required for the committee to complete its work.
The liquidation period may be renewed, and its expenses may be increased if necessary, until the committee completes its work. The employer may appoint one or more members to the liquidation committee if necessary, or if the committee deems it necessary to complete liquidation procedures with the Authority's approval. In all cases, the committee shall submit a report on its work to the Authority. Upon liquidation, the fund's assets shall be distributed to its members according to each member's contribution ratio.

(Article Three)

Forms numbers (1, 2, 3, 4, 5) attached to the Executive Regulations of the Law on Special Insurance Funds are replaced as attached.
A new form numbered (6) is added to the aforementioned forms.

(Article Four)

This decision shall be published in the Egyptian Gazette and shall take effect from the day following its publication date.

Issued on 26/2/2005

Minister of Investment

Dr. Mahmoud Mohieldin