FRA Further Amends its Microinsuran

The board of the Financial Regulatory Authority (“FRA”) recently amended the regulations and templates for standard collective microinsurance policies that cover microfinance clients, to account for the two separate kinds of insurance as detailed in the Insurance Supervision and Control Law No. 10 of 1981: insurance for persons and funds and that for property and liabilities.[1] Back in March 2019, a FRA board decision was published with a single template for the standard collective microinsurance policy.[2] It required insurance companies wishing to cover microfinance clients of microfinance associations of categories A and B (with microfinance portfolios of at least EGP 10 million), microfinance companies, and microfinance NGOs to use the template for the said policy that was attached to the decision while also setting the monthly premium at a maximum of 30 piasters for every EGP 1,000 of the insurance amount.[3] The new FRA decision published this month replaces the single policy template with two – a microinsurance policy template for companies licensed to undertake the insurance for persons and funds (a collective life insurance policy) and a microinsurance policy template for companies licensed to undertake the insurance for property and liabilities (a collective insurance policy) – when covering microfinance clients of microfinance companies as well as of categories A and B microfinance associations and NGOs with microfinance portfolios of at least EGP 10 million (rather than all microfinance NGOs). Simultaneously, the decision specifies the monthly insurance premium for the former (persons/funds microinsurance) at a maximum of 30 piasters for every EGP 1000 of the insurance amount while the property/liabilities microinsurance has no set monthly insurance premium provided that the FRA approves the proposed amount. Finally, insurance companies undertaking either persons/funds insurance or that of property/liabilities have a period of 6 months to comply with the new decision.   [1] FRA Board of Directors Decision No. 166/2019 amending Decision No. 16/2019 issuing a template for the standard collective microinsurance policy to cover microfinance clients, Egyptian Gazette, Issue 26, 2 February 2020. [2] FRA Board of Directors Decision No. 16/2019 issuing a template for the standard collective microinsurance policy to cover microfinance clients, Egyptian Gazette, Issue 55, 7 March 2019. [3] FRA Board of Directors Decision No. 31/2015 classifies microfinance associations and NGOs into three categories: (1) category A, with microfinance portfolios of at least EGP 50 million; (2) category B, with microfinance portfolios between EGP 10 million and EGP 50 million; and (3) category C, with microfinance portfolios of less than EGP 10 million.