The Board of Directors of the Financial Regulatory Authority (FRA) has issued Resolution No. 280 of 2023. The decision gives insurance brokerage companies that use technology in their business model a three-month notice to comply with the provisions of the Authority’s Board of Directors Resolution No. 215 of 2023.
Resolution No. 215 of 2023 issued by the Authority’s Board of Directors modifies Resolution No. 23 of 2014 regarding the rules for practicing insurance brokerage activity in Egypt. It forbids insurance brokers from collecting insurance fees, premiums, or other amounts from clients by any means to their accounts. They are required to collect these amounts through the payment point machines provided to them by the company or any other non-cash payment method of their choice, or according to checks issued by customers in favor of the company.
Also, insurance brokers do not receive any amounts in cash from clients for policy fees or premiums except within the limits specified in the Law Regulating the Use of Non-Cash Payment Means No. 18 of 2019 and its executive regulations. This is all according to receipts approved by the company and given to the broker as a personal trust. Customers must deliver the original receipt and submit a copy of it to the company signed by the customer indicating that they have received the original. He must commit to delivering the collected amounts to the company within five working days at most from the date of collection.
According to the new decision, brokerage companies have a period of three months from the day after their publication. The aforementioned companies are obligated to apply to the Authority no later than fifteen days from the date of the decision implementation, provided that it includes the requirements and procedures that the company will follow to fully comply with the Authority’s Board of Directors Resolution No. 215 of 2023. The Authority then studies the request submitted by the companies and may extend the mentioned deadline for another additional period based on the justifications provided by the company.
Mohamed Farid, Chairperson of FRA, said that the Authority’s management aims to improve the work mechanisms of the companies to achieve greater protection for the rights of insurance policyholders, as well as the controls regulating the relationship between customers and companies, and between insurance companies and insurance brokerage companies.
Farid added that the use of technological mechanisms and applications is a key factor in achieving the insurance coverage that the Authority is working to achieve. He also said that the process of electronic linking with companies, which the Authority directed, will be the start of accurate databases that achieve more transparency and direct oversight quickly and effectively, enabling the Authority to develop work policies within the insurance sector.
