• Dr. Omran: 2019 witnessed the formation of the first board of directors of the Policyholder Protection Funds for the first time in Egypt
• Dr. Omran: Rules and procedures for the formation of the first board of directors of Policyholder Protection Funds since more than 37 years from the issuance of the Law no. 10 of 1981 for Insurance Supervision and Control in Egypt
Dr. Mohammed Omran – FRA’s Chairman stressed the keenness of FRA’s Board of Directors to speed up the process of setting the rules, procedures and controls related to the formation of the first board of directors of “Policyholder Protection Funds”. The said rules will maintain the safety and stability of non-banking financial markets and protect consumer rights.
FRA’s Chairman emphasized that in FRA’s BOD meeting held on 20th of January, the Board grants FRA’s Chairman the right to select two members for the board of directors of “Policyholder Protection Funds”, adding that one of these member shall be a client of life insurance companies and the other shall be a client of property liability insurance companies. Moreover, they must meet the following seven conditions, foremost of which is not to be an employee or a member of the board of directors of any of these companies or any joint stock company or its affiliates. Also, the amounts of the client’s insurance coverage shall not be less than 2 million pounds at the time of selecting him and 10 million pounds for those representing clients of property liability insurance companies.
Dr. Omran noted that FRA’s BOD decision no. (4) of 2019 has also authorized him to select three other expert members in the board of directors of “Policyholder Protection Funds”. Also, they shall meet a number of conditions including the Egyptian nationality where both parents shall be Egyptians. In addition, the period of their experience in the field of insurance or reinsurance or related sciences or in a legal field shall not be less than fifteen years. Meanwhile, the actuary shall be listed at FRA’s registry for a period not less than ten years.
Dr. Omran revealed that FRA’s BOD decision determine the rules and procedures for selecting representatives of insurance companies in the Board of Directors of “Policyholder Protection Funds”. The rules stated that elections shall be held in this regard, after fulfilling a number of conditions in the company member in the Fund. The company may select a representative in the Fund’s BOD. In addition to a number of conditions to be met by the natural person who represents the company. Afterwards he shall apply for his candidacy. The candidate shall be the Chairman of the company’s BOD or the company’s Managing Director.
FRA’s Chairman said that Decision no. (3) of 2019 set special rules and procedures for selecting representatives of the insurance companies in the Fund’s BOD in accordance with certain procedures starting with the publication in a large daily newspaper and on the websites of both the Authority and the Fund. Also, the said rules stated that requests for candidacy shall be submitted at least a week before the deadline. FRA shall receive applications for candidacy for one week accompanied by a number of documents including a pledge signed by the candidate not to combine the membership of the Fund’s BOD and the membership of the Board of Directors of the Egyptian Insurance Federation.
In the same context, Counselor Reda Abd El-Moaty, FRA’s Vice-Chairman explained that Article 7 of the Board’s decision has determined that a committee formed by a decision of FRA’s Chairman shall examine applications for candidacy on the day following the deadline for accepting candidacy applications within a period not exceeding five working days from the date set for receiving applications for candidacy. Moreover, FRA shall prepare two initial lists of candidates, one of which represents life insurance companies, and the other represent property liability insurance companies. The list shall be published on the websites of both the Authority and the Fund. Elections shall be conducted within one week from the date of publication.
Abd El-Moaty stressed that at least quarter the number of member companies in the Fund shall attend the elections. If the quorum of attendance is not fulfilled, elections shall be postponed to the next week. The second date set for conducting the elections shall be posted on the websites of both the Authority and the Fund. In this case, the elections shall be conducted “whatsoever” was the number of present members of the Fund.
The elections are also supervised by another committee with two representatives from FRA and a member of the Egyptian Insurance Federation, two experts, one of them in insurance affairs, and another in the field of law chosen by FRA’s Chairman. The Committee shall be responsible for preparing the elections, the registration of attendance and verification of those entitled to vote. Besides, the committee shall supervise voting integrity, diverts the votes after excluding the incorrect votes, and announces the result.
Abd El-Moaty pointed out that FRA’s BOD decision has regulated the right of every member company in the Fund to appeal to FRA’s Chairman upon putting any candidate in the lists of candidates for membership of the Fund’s BOD within one week from the date of the announcement of the initial lists of candidates. In addition, the same right is granted for those whose name is excluded. The grievance shall be submitted to FRA’s Grievance Committee which shall decide on the grievance within a period not exceeding two weeks from the date of grievance deadline. The decision of the Grievance Committee shall be final and enforceable. Also, the Grievance Committee shall be competent to decide on grievances against the result or procedures of elections.
The decision also regulates lacking of one of the conditions of membership or cancellation of the license of the company represented by a member of the board of directors or dissolution of relationship between the company and its representative in the Fund’ BOD . Article 16 stated that the following member in the number of votes in the last election shall replace that member and the term of his membership shall be complementary to the period of his predecessor.