Impact of Egypt’s Unified Insurance Law No. 155 of 2024
The Unified Insurance Law No. 155 of 2024 marks a significant shift in the regulation of Egypt’s insurance sector, aiming to unify scattered legislation into a comprehensive framework that enhances market efficiency and safeguards the rights of all stakeholders. The law introduces innovative provisions that establish a balance between protecting policyholders’ rights and encouraging investment in the sector, focusing on licensing, contract transparency, financial reserves, and digital insurance development.
One of the law’s most notable features is Article (158), which sets stringent standards for licensing insurance companies to ensure they possess the financial and administrative competence necessary for market operations. Article (5) mandates comprehensive disclosure of policy terms and conditions, protecting clients and fostering transparency. Article (204) requires companies to maintain sufficient financial reserves to ensure their ability to meet obligations, promoting market stability. Meanwhile, Article (199) regulates digital insurance, paving the way for technological innovation and the provision of modern, efficient services.
Despite these advancements, transitioning from the previous legal framework to the new unified law has caused significant confusion in the market. A key source of this confusion is the lack of clear guidance on handling contracts established under the old regulations. The law does not specify whether these contracts will remain governed by the previous rules or need to be amended to align with the new provisions, raising legal questions and delaying dispute resolutions.
The new licensing requirements outlined in Article (158) impose stricter financial and administrative obligations that small and medium-sized companies may find challenging to meet within a short timeframe. This could lead to some companies exiting the market, reducing competition and diversity. Additionally, Article (199)’s focus on digital insurance presents technical challenges for traditional companies that rely on outdated systems, requiring significant investment to comply with these new demands.
Ongoing disputes under the old laws pose another challenge. The law provides no clear mechanisms for resolving these disputes, leaving economic courts uncertain about which laws to apply to existing cases. This ambiguity may prolong legal proceedings and exacerbate uncertainty in the market.
To address these challenges and ensure the smooth implementation of the law, it is essential to adopt well-designed transitional phases that allow companies adequate time to adjust to the new requirements. Issuing detailed executive regulations that clarify practical application steps and set clear timelines for each phase is crucial. Raising awareness through targeted campaigns and workshops for companies, judges, and legal advisors will also ensure a comprehensive understanding of the new law’s provisions. Additionally, providing technical and financial support to small and medium-sized companies can help them transition to digital systems and meet the law’s requirements.
The Financial Regulatory Authority (FRA) has played a positive role in mitigating the confusion surrounding the law’s implementation. By organizing workshops in collaboration with the Ministry of Justice, the FRA has trained judges in economic courts on the law’s provisions, helping unify legal interpretations and expedite dispute resolution. The FRA has also launched initiatives to educate companies about the new requirements and provide necessary guidance.
However, to fully capitalize on the law’s potential, the FRA must take further steps. Establishing an interactive platform to address inquiries from companies and policyholders, offering technical and financial assistance for digital transformation, and enhancing field monitoring to ensure compliance with the new provisions are critical measures. Additionally, publishing periodic reports on the law’s impact will help refine its application and inform future legislative improvements.
The Unified Insurance Law No. 155 of 2024 presents a real opportunity to develop Egypt’s insurance sector. Still, its success depends on addressing the challenges arising from its implementation. Effective coordination between the Financial Regulatory Authority, economic courts, and market stakeholders will be the key to achieving stability and sustainable growth in this vital sector.
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