Dr. Mohammed Omran FRA’s Chairman and his Deputy Counselor Reda Abdel Moaty held a meeting with heads of Takaful insurance companies – at the Authority’s headquarters – to discuss how to make use of takaful insurance surpluses not received by policyholders for more than three years.
FRA’s Chairman says that Takaful insurance activity is subjected to new regulations governing the work of Takaful insurance companies in accordance with decision no. 23 of 2019. The said decision stipulates that Takaful Insurance Company shall manage the insurance business and the associated investment side for policyholders (subscribers) for a fee. Takaful insurance company shall form a policyholders’ fund which includes the company’s total accounts pursuant to its statute and in accordance with the Egyptian Accounting Standards Manual for Insurance Companies. Also, the said fund shall include the assets, liabilities and rights of Takaful policyholders, subscriptions and revenues. These accounts shall be completely separated from the accounts managed by Takaful insurance companies.
Therefore, Dr. Omran stresses that the insurance surplus – which remains of total subscriptions, returns on investment and any other income after deducting compensations, technical allocations, reserves and shareholders’ equity – shall be redistributed to policyholders in accordance with the rules set by FRA’s decisions.
Dr. Omran emphasizes that FRA finds out through its periodic inspection on Takaful insurance companies that some insurance policyholders do not obtain their share of the surplus from policyholders’ fund, especially if the amount of the surplus is limited in policies with low premiums, such as compulsory auto- insurance on cars. FRA has always notified the insurance companies to send a periodic statement on the movement of the surplus balance not received by policyholders. It is worth mentioning that surpluses set aside in separate accounts reach about 190 million pounds by the end of July 2019.
Dr. Omran adds that the Authority holds a meeting with members of Shariah committees of Takaful insurance companies. During the meeting, they discuss how to make use of these balances on the basis that those committees formed within each Takaful insurance company to monitor and supervise company’s transactions and express an opinion on the extent of its conformity with the provisions of Islamic Sharia and its principles.
Dr. Omran reveals that the meeting with heads of Takaful insurance companies has concluded to agree on the formation of a committee chaired by Counselor Reda Abdel Moaty – FRA’s Deputy Chairman and the membership of Takaful insurance companies (up to 10 companies) and six companies operating in properties and liabilities and four life insurance companies. The committee shall set mechanisms to to make use of takaful insurance surpluses not received by policyholders for more than three years, that is due to Takaful companies’ belief in its role to serve the country.