CAIRO: The newly-formed Egyptian Insurance Brokers Association (EIBA) is concerned that the latest amendment to the insurance law will threaten the welfare of local brokers.
The amendment is currently being discussed in parliament and includes provisions to reduce the stamp tax on insurance premiums and to allow foreign brokers to provide corporate insurance in Egypt.
We are concerned about allowing international corporate brokers to come into the market before giving the opportunity for Egyptian brokers to form corporate identities, says EIBA Chairman Adel Shaker. Shaker adds that since the amendment is already under consideration in parliament, it may be too late for his organization to lobby for the removal of this provision. He believes that the local insurance brokerage market needs a grace period of at least three to five years before foreign competitors are allowed.
It s not protection, says Shaker. The London market, for example, is famous for their brokers, and it s the local brokers that give the London market their reputation, and then international brokers came. Why not give the Egyptian brokers the opportunity to train themselves and improve their standard of services? And then [the government can] allow international brokers to come and affiliate with them, merge with them and form multinational brokers in Egypt.
Meanwhile, local brokers stand to benefit from the reduction of the stamp tax on insurance premiums. The reduction in the stamp tax will encourage the big enterprises in Egypt to insure locally, instead of insuring abroad to avoid the high local taxes, explains Shaker.
The EIBA was recently established and was inaugurated yesterday at a meeting of the Federation of Mediterranean Insurance Brokers (FMBA) in Cairo. Our aim is to improve the image of the insurance brokers in Egypt, says Shaker, but before we can talk about image we have to train them.
The training will focus on broker rules and regulations. The Ministry of Investment and the Egyptian Insurance [Supervisory] Authority put rules and regulations about licensing brokers and, in cooperation with us, will have training sessions and seminars for the brokers to qualify to be licensed, says Shaker.
The new association was created the support of the FMBA. The FMBA gave us all the technical help to establish our Egyptian association, explains Shaker. And they continue to give us technical help by forming a training committee especially to help brokers from member countries to have training in their countries for free, and to give them all the technical support they need to improve the level of their services in their countries.
FMBA President Francesco Paparella adds that his organization decided to hold its latest meeting in Cairo as an expression of solidarity with brokers in Egypt.
We are here in this meeting that we convene every six months to send a message that we are close to and support the Egyptian insurance market, says Paparella.
The FMBA promotes cooperation of brokers in the area. I believe that the Mediterranean region and its insurance market may be a strong substitute for the market in the Far East, which is full with risks and animosity, explains Paparella.
Paparella would not comment on the state of regulations in Egypt and the latest amendments to the insurance law, explaining that each country should develop insurance legislation according to its own special circumstances.
But the insurance market should be unified in all countries [with respect to] the code of ethics governing the responsibilities of brokers towards each other, adds Paparella.
The FMBA s work is augmented by the Barcelona Process, which seeks to make the Euro-Mediterranean region a free trade area by 2010. There was an effort as part of the Barcelona Process to strongly support the public awareness of the insurance market, says Paparella, which was followed by several meetings and we will try to intensify this effort.