The Egyptian Financial Supervisory Authority has issued a comprehensive update to the subscription and pricing regulations for credit and guarantee insurance policies. This update aims to develop underwriting and pricing policies, reinsurance, and risk management in the insurance sector. The new regulations will apply to property and liability insurance companies licensed to practice credit and guarantee insurance, excluding commercial credit and guarantee insurance. The update includes clear standards and strict controls to improve the financial discipline and stability of the insurance sector.
The updated regulations, issued by Dr. Islam Azzam, Chairman of the Financial Supervisory Authority, require insurance companies to have a written underwriting policy and a technical and actuarial methodology for determining the minimum technical price for credit and guarantee insurance policies. The policy should include criteria for accepting or rejecting risks, evaluating creditworthiness, and determining retention limits and guarantees. The regulations also prohibit insurance companies from issuing or renewing policies with a rate lower than the minimum technical price.
The regulations outline several key elements that insurance companies must include in their underwriting policy and pricing methodology. These elements include creditworthiness evaluation criteria, retention limits, and guarantees required. Insurance companies must also have a methodology for evaluating creditworthiness, which should be based on reliable data and statistical analysis. The regulations also require insurance companies to conduct regular reviews of their underwriting and pricing policies to ensure they are in line with the new regulations.
The updated regulations also focus on risk management and reinsurance. Insurance companies are required to have a reinsurance program that is proportionate to the nature and size of the risks they assume. The program should also take into account the solvency and credit rating of the reinsurer, as well as the concentration of risks. The regulations prohibit insurance companies from having a significant concentration of risks with a single reinsurer.
The regulations also introduce new requirements for the evaluation of creditworthiness. Insurance companies must use a combination of factors, including credit ratings, debt burden, and other statistically significant variables, to evaluate the creditworthiness of borrowers. The regulations also require insurance companies to conduct regular tests and validations to ensure the accuracy of their creditworthiness evaluations.
The updated regulations are expected to have a positive impact on the insurance sector in Egypt. According to Dr. Islam Azzam, the regulations were issued after extensive consultation with insurance companies and reinsurers. The regulations reflect the Financial Supervisory Authority's commitment to developing and improving the insurance sector in Egypt.
The new regulations will help to improve the stability and discipline of the insurance sector, which is essential for the growth and development of the Egyptian economy. The regulations will also help to protect policyholders and ensure that insurance companies are able to meet their obligations. Overall, the updated regulations are a positive step forward for the insurance sector in Egypt.
Key points
- The Egyptian Financial Supervisory Authority has issued updated regulations for credit and guarantee insurance policies to improve underwriting and pricing policies, reinsurance, and risk management in the insurance sector.
- The regulations require insurance companies to have a written underwriting policy and a technical and actuarial methodology for determining the minimum technical price for credit and guarantee insurance policies.
- The updated regulations aim to improve the stability and discipline of the insurance sector in Egypt, which is essential for the growth and development of the Egyptian economy.
