• Dr. Omran: FRA approves the statute of motor insurance pool, property insurance companies and the current and future liabilities of the pool’s members
• Dr. Omran: Motor pool eliminates all the disadvantages of the current practices and combats forged insurance policies
• Dr. Omran: Motor pool facilitates the digital transformation upon the issuance of policies and settlement of compensations at a lower cost than it is now
• Dr. Omran: Reviewing companies’ shares every two years in accordance with the rules adopted by the Authority, the most important of which is company’s capital adequacy and ensuring that its capital suit the participation in this activity
• Dr. Omran: Priority in the recruitment is given to current employees of insurance companies who have direct relation with compulsory auto liability insurance departments
In an organizational step towards achieving stability in compulsory motor insurance system and digital transformation in the non-banking financial services sector and the elimination of improper practices, Dr. Mohammed Omran- FRA’s Chairman issued decision no. 252 of 2019 on establishing the Compulsory Motor Insurance Pool. The Compulsory Motor Insurance Pool -solely – manage this branch of insurance on behalf of its members from all insurance companies and cooperative insurance company licensed to practice compulsory motor liability insurance in Egypt, and approves the statute of motor pool.
FRA’s Chairman said that the establishment of Compulsory Motor Insurance Pool is an important step for the insurance industry, adding that this step comes late after more than ten years. He noted that such step should have been achieved pursuant to Law no. 72 of 2007 to achieve the objectives and purposes of the legislator. In addition, Compulsory Motor Insurance Pool aims at avoiding the existing problems of the activity’s high cost and forgery cases, which resulted in a significant decrease in the premiums of Compulsory Motor Insurance during the last period.
Dr. Omran confirmed that activating compulsory motor insurance pool would eliminate all the current negative aspects. He added that the pool would manage this branch of compulsory insurance in terms of policies’ issuance, compensations’ settlement and dealing with clients through digital technology in a manner that helps the clients to obtain their service faster. He noted that this would facilitate the construction of a comprehensive database of compulsory motor insurance. Accordingly, this allows more accurate review of the prices of this insurance branch to reach its fair premiums.
Dr. Omran said that the insurance companies that engaged- currently or in the future- in property and liability activities will become a member of motor pool. He added that the companies’ shares will be reviewed every two years according to the rules set by the Authority. The most important of these rules are the companies’ capital adequacy and ensuring that its capital suits the participation in this activity.
Moreover, it is not permissible to withdraw from the pool for any reason, but companies shares may be reduced in accordance with the conditions companies’ capital adequacy and pursuant to FRA’s vision in this regard.
FRA’s Chairman explained that motor pool will replace the companies in applying Law no. 72 of 2007, as well as granting finance to governmental insurance fund which covers the damages resulting from accidents of rapid transit vehicle. In addition, motor pool will prepare financial statements according to the accounting standards of the insurance companies and holds sufficient funds to meet its obligations towards policyholders. Also, it will be responsible of financial settlements with insurance companies through a joint account according to the shares of companies accredited by the Authority.
Dr. Omran pointed to the insurance companies’ agreement (the card agreement) – as stipulated in the statutes of motor pool – stating that Misr Insurance Company will continue to pay compensation of the Orange Card between the Arab countries as being the representative of the Egyptian market, pending consideration of the pool’s role in this matter.
FRA’s Chairman confirmed that the pool will audit its work through the Central Auditing Organization and auditors accredited to the Authority. It will be managed through an administrative committee elected by the general assembly of seven members of insurance companies’ senior management with the help of an Executive Director to follow up the pool’s daily work and facilitate it.
Dr. Omran stressed that FRA was keen to include in the pool’s statutes a provision which stipulates that priority in the recruitment will be given to current employees of insurance companies, especially those who have direct relation with compulsory auto liability insurance departments. Besides, directing the pool to use this staff in coordination with the work team of Insurance Federation of Egypt that manage this file. In addition to promoting any means that support this staff according to companies’ conditions and recommending training courses for them to enhance their skills.