Dr. Mohammed Omran – FFRA’s Chairman announced the approval of the Authority’s Board of Directors to suspend granting any new licenses to Insurance and Reinsurance Companies for a year, while instructing the relevant departments in the Authority to prepare a study on the conditions and controls regulating the work of these companies with a view to developing and assisting them to perform their objectives in accordance with the best international practices and experiences in the global insurance markets.
Dr. Omran explained that FRA’s BOD decision was taken in light of a study conduct on the Egyptian insurance market which revealed that the number of companies licensed to engage in insurance brokerage activity is sufficient and exceeds the market’s need now. Thus, there is no need to increase the number of companies operating in the same field and granting them license which may damage the industry. He added that Egypt shall benefit from the best corresponding experiences in the leading insurance markets.
FRA’s Chairman said that after the promulgation of Law No. 118 of 2008, the Authority allowed for the first time the practice of insurance brokerage activity for legal persons alongside natural persons. It is worth mentioning that the Authority granted license for the first company to engage in insurance brokerage activity in February 2009. Now, the number of licensed and valid companies reached 90 brokerage insurance firms distributed among 81 insurance brokerage companies and 9 reinsurance brokerage firms.
Dr. Omran emphasized that the decision to suspend granting any new licenses to insurance or reinsurance brokerage firms was issued out of the Authority’s responsibility to work on developing non-banking financial activities, including insurance activity, through continuous monitoring of the actual practices of the activities of insurance brokerage companies in Egypt and assessing its establishment and licensing to practice activity in the Egyptian market during the past ten years.
FRA is playing its supervisory and regulatory role in the non-banking financial sector in a manner that ensures the safety, stability and development of these markets in accordance with the provisions of Law No. 10 of 2009 on regulating non-banking financial markets and instruments which defines FRA’s activity and terms of reference.