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EFSA Approves the Fourth License for the E-Issuance of Compulsory insurance policies

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• EFSA has made remarkable progress in introducing the electronic issuance mechanism for the Egyptian insurance market
• The Authority supports companies to switch to the E-issuance and distribution of insurance policies to face negative practices in compulsory motor insurance
 
Counselor /Reda Abdel Moaty – EFSA’s Chairman grants the fourth license to an insurance companies in Egypt -with foreign capital- to apply the electronic issuance and distribution of compulsory motor insurance policies  that is after checking the availability of the needed technological structure requirements by making field visits for the  insurance companies through working groups specialized in technology to verify the documents submitted to EFSA. In addition , the company shall carry out a practical test for the e-issuance program. 

 This mechanism allows the issuance of compulsory motor insurance policies – that cover the damage caused by Accidents of rapid transit vehicles (known as compulsory motor insurance) – electronically through the insurance company’s information system. The policy shall be printed and distributed through any of the insurance companies within traffic units spreading in different regions and governorates. This mechanism is an organizational step to pursue the rapid and continuous development of Information and Communications Technology (ICT) which had a great impact on opening wide horizons in facilitating the issuance and distribution of insurance policies and reducing the negative practices in compulsory motor insurance. It is worth mentioning that the total number of policies issued in the compulsory motor insurance branch since the beginning of the year until the end of May 2017 was amounted to 1.508 thousand policies and the issued premiums were 278.8 million pounds for 21 insurance companies registered in Property and liability insurance.

Counselor /Reda Abdel Moaty noted that – in a qualitative legislative step in the Egyptian insurance industry – EFSA’s BOD has issued decision no. (122) of 2015 to approve the E-issuance and distribution of insurance policies using information networks. The decision allows the issuance of the E-insurance policies directly to the client and its distribution through a number of companies identified by EFSA. Also, EFSA asserted that  any  insurance company wishing  to activate this mechanism and providing the distribution of  e-insurance policies  shall  obtain a prior approval  from  EFSA in this regard. These policies include compulsory motor insurance policies which are issued for accidents arising from the rapid transit vehicle and travel insurance policies as well as temporary life insurance policies that do not require a medical examination

He added that in order to activate the electronic issuance mechanism, the Authority has approved the payment of the installments of electronically distributed insurance policies using the electronic payment methods in force, including the direct debit from bank account or bank payment cards and other payment methods approved by the Central Bank of Egypt.

 He added that decision no. (730) of 2016 stated that the electronically printout of the insurance policy as well as the website used for entering the data of the policy shall stress on the fact that the insurance agents is only a channel for marketing and distribution, it is not responsible for the terms and conditions of insurance products and it does not pay any compensations, and that the responsibility lies on the contracted insurance company only.
 

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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