In a significant move to modernize Egypt’s insurance industry, the Financial Regulatory Authority (FRA) has introduced Decision No. 15 of 2025. This decision outlines the incorporation and licensing requirements for insurance and re-insurance companies, complementing the Unified Insurance Law No. 155 of 2024, which will take effect in July 2024. The aim is to simplify and enhance the regulatory framework for the sector.
Exclusive Authority of the FRA
The FRA is now the sole authority responsible for the incorporation and licensing of all insurance and re-insurance companies operating within the sector. This centralization is expected to improve the consistency and efficiency of regulatory practices and oversight.
Incorporation Requirements
Companies wishing to enter the insurance or re-insurance market must meet specific incorporation criteria:
- Legal Structure: Companies must be registered as joint-stock entities, with their business objectives exclusively focused on insurance and related activities.
- Capital Requirements: The FRA has set minimum capital thresholds. For general insurers, the initial required capital is EGP 400 million, increasing to EGP 600 million by the end of the second year. Re-insurance companies have a higher minimum requirement of EGP 1 billion.
- Ownership Structure: Companies must comply with FRA regulations regarding ownership, including the identification of ultimate beneficial owners.
- Integrity of Founders: Founders must meet integrity standards, which include having no prior convictions for financial crimes or ethical misconduct.
Licensing Procedures
Once registered in the Commercial Registry, companies can apply for a license within three months. The application must include:
- Shareholder Information: Details about shareholders, including ownership percentages and nationalities.
- Feasibility Study: A comprehensive assessment covering the company’s plan, vision, strategy, and financial projections for the first five years.
- Technological Infrastructure: A declaration regarding the maintenance of technological systems and data protection measures.
- Organizational Documents: Draft articles of association and details about the organizational structure and board members.
- Financial Statements: Financial documents for shareholders owning 10% or more of the capital.
- Capital Deposit Proof: Evidence of capital deposit in a bank authorized by the Central Bank of Egypt.
A specialized committee within the FRA will review applications and make recommendations to the FRA Board of Directors within one month. The FRA retains the discretion to reject applications based on market needs, the company’s potential contribution, ownership structure, or regulatory compliance.
Compliance Timeline
Companies have until July 10, 2025, to comply with the new requirements. Within one month of this decision’s implementation, companies must submit a schedule outlining their compliance steps.
Conclusion
The FRA’s comprehensive guidelines for incorporation and licensing are crucial for enhancing the integrity and transparency of Egypt’s insurance sector. By establishing clear capital requirements and regulatory procedures, the FRA aims to foster a stable and investor-friendly environment conducive to growth and innovation in the industry.
This article offers a general overview of the subject matter and is not a substitute for legal advice. For guidance tailored to your specific circumstances, professional consultation is recommended.
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