New CBE Regulations to Facilitate B
New CBE Regulations to Facilitate Bank Assurance
Bank assurance is the activity whereby those insurance companies registered at the Egyptian Financial Supervisory Authority ("EFSA") could market their services and documents they deal with, through bank branches.
The document used to market products and services of insurance companies is considered one of the main international tools to sell insurance products. This is because bank branches are spread everywhere and the audience is quite familiar with them. However, since insurance companies fall under the supervision of EFSA, while banks whose branches are used for the marketing of insurance services are under the Central Bank of Egypt ("CBE") supervision, then the activity of bank insurance requires coordination and cooperation between both supervisory entities.
In this context, CBE has issued several amendments pertaining to the regulations of banks carrying bank insurance activities; the last of which was a decision on 22 May 2013. The said decision has stated that banks are not allowed to contract with more than two insurance companies, provided that they are not competing in the sale of the same insurance product. This means that one should be working in the sale of life insurance policies, while the other in the sale of assets insurance policies.
In order to encourage the expansion of the insurance market, the CBE issued a decision on 28 March 2016, addressed to Egyptian banks, on the amendment of a number of regulations regarding banks that carry bank assurance activities. The Decision stated that a bank could contract one company in each of the following insurance fields (commercial property insurance, takaful property insurance, commercial individual insurance, and takaful individual insurance).[1] Consequently, a single bank branch can become an outlet for transactions with four different types of insurance companies.
[1] CBE circular dated 28 March 2016, available through this link.
Bank assurance is the activity whereby those insurance companies registered at the Egyptian Financial Supervisory Authority ("EFSA") could market their services and documents they deal with, through bank branches.
The document used to market products and services of insurance companies is considered one of the main international tools to sell insurance products. This is because bank branches are spread everywhere and the audience is quite familiar with them. However, since insurance companies fall under the supervision of EFSA, while banks whose branches are used for the marketing of insurance services are under the Central Bank of Egypt ("CBE") supervision, then the activity of bank insurance requires coordination and cooperation between both supervisory entities.
In this context, CBE has issued several amendments pertaining to the regulations of banks carrying bank insurance activities; the last of which was a decision on 22 May 2013. The said decision has stated that banks are not allowed to contract with more than two insurance companies, provided that they are not competing in the sale of the same insurance product. This means that one should be working in the sale of life insurance policies, while the other in the sale of assets insurance policies.
In order to encourage the expansion of the insurance market, the CBE issued a decision on 28 March 2016, addressed to Egyptian banks, on the amendment of a number of regulations regarding banks that carry bank assurance activities. The Decision stated that a bank could contract one company in each of the following insurance fields (commercial property insurance, takaful property insurance, commercial individual insurance, and takaful individual insurance).[1] Consequently, a single bank branch can become an outlet for transactions with four different types of insurance companies.
[1] CBE circular dated 28 March 2016, available through this link.