The Financial Regulatory Authority issues the Incorporation and Licensing Requirements and Procedures for Insurance and Re-Insurance Companies

On February 17, 2025, the Board of Directors of the Financial Regulatory Authority (“FRA”) issued the second executive decision No. 15 of 2025 (the “Decision”) of the Unified Insurance Law No. 155 of 2024 enacted in July 2024. The new Decision sets out the incorporation and licensing requirements and procedures for insurance and reinsurance companies, as well as other entities operating in the insurance sector.

Highlights of the Decision:

In accordance with the Decision, the FRA shall exclusively and solely be responsible for the incorporation and licensing of insurance, reinsurance companies, and companies operating in the insurance sector.

Incorporation and Licensing Requirements:

• Companies must be established as joint-stock companies in Egypt, with their purpose limited to insurance, reinsurance, or related activities. Except for microinsurance and specialized medical insurance companies (HMOs), companies cannot carryout life insurance and wealth formation activities along with property and liability insurance (non-life).
• The minimum issued, and paid-up capital must meet the thresholds set by the FRA’s Board of Directors in its Decision 196 of 2024 issued on 19 January 2024.
• The ownership structure must comply with FRA regulations especially Decision No. 177 of 2024 and ensure transparency in identifying the ultimate beneficial owners and verify the legality of funds.
• Founders must meet integrity and reputation criteria, including no prior convictions for crimes related to dishonesty or financial misconduct. Legal persons must demonstrate financial stability and compliance with FRA regulations.

Establishment Procedures:

Companies must submit an application to the FRA, along with a list of necessary documents which are not limited to the following:

1. Shareholders details, ownership percentages, and nationalities along with the necessary identification documents.
2. Non confusion certificate.
3. A technical and economic feasibility study outlining the company’s plan, vision, strategy, and financial projections for the first five years.
4. A declaration to maintain necessary technological infrastructure and data protection systems.
5. Draft articles of association, organizational structure, and all the details of each board member.
6. Financial statements for shareholders owning 10% or more of the capital.
7. Proof of depositing the company’s capital in a bank licensed by the Central Bank of Egypt.

A technical, legal, and financial committee at the FRA shall review the applications and submits recommendations to the FRA’s Board of Directors for approval within one month. The FRA may reject applications based on market needs, the company’s contribution to the market, ownership structure, or non-compliance with regulatory standards.

Licensing Procedures:

• Companies must apply for a license within three months from the date of registration of the company at the Commercial Registry.
• The company must submit a list of documents including the company’s articles of association, tax card, commercial register extract, lease agreement for headquarters, and proof of capital deposit for each insurance branch.
• Companies must demonstrate adequate reinsurance arrangements to protect policyholders and ensure financial stability.
• The board must include a majority of non-executive members, with at least two independent members and 25% of members having insurance experience.
• Companies must disclose any conflicts of interest among board members or shareholders and comply with corporate governance regulations.

The FRA must decide on licensing applications within 30 days of receiving all the required documents. In case the applicant has not received any feedback from the FRA within this period, this shall be considered a rejection by the FRA.

The FRA may, at its sole discretion, conduct inspections to verify compliance with administrative, technical, and financial requirements. Companies must notify the FRA of any changes to their incorporation or licensing details within 30 days, with the required supporting documentation.

In all cases, companies must start operations within six months from obtaining the license. However, an additional period of six months may be granted subject to the FRA’s discretionary approval.

Reconciliation:

All addressees of the Decision (i.e., companies that have not fulfilled the licensing requirements/procedures) are mandated to reconcile by July 10, 2025, and submit a compliance timetable to the FRA within a period of one month from the date of the Decision.

For more information, please contact Ali El Hawary, Partner, Head of Banking & Finance, Egypt Office Yasmeen Qotbi, Senior Associate, at the Banking and Finance department, Egypt office.