FRA issues comprehensive framework to regulate microinsurance activity
Updated 2/5/2026 1:23:00 PM
Arab Finance: The Financial Regulatory Authority (FRA) has issued a comprehensive set of regulations governing microinsurance activity, as per a statement.
The move is aimed at enhancing financial inclusion, expanding insurance coverage for low-income groups, and supporting the growth of small and micro enterprises in Egypt
The FRA said this establishes a clear regulatory framework for microinsurance, including a precise definition of the activity, the conditions for practicing it, and the obligations of licensed insurance companies and authorized branches.
The decision sets standards to ensure the simplicity and clarity of insurance policies, flexible premium collection mechanisms, and the rapid disbursement of compensation, alongside detailed rules for underwriting, marketing, and claims settlement.
Under the decision, microinsurance is defined as insurance services targeting individuals with limited income, providing protection against specific risks in exchange for premiums proportionate to the nature of the insured risk, within a maximum coverage limit determined by the FRA’s board of directors.
Chairman of the FRA Mohamed Farid said that regulating microinsurance activity through clear and precise controls represents an important step toward strengthening insurance protection for the most vulnerable groups.
He noted that the new framework ensures ease and simplicity of products, faster premium collection and compensation payouts, and broader insurance awareness, enabling underserved segments of society to access insurance services more efficiently while supporting the growth and sustainability of small and micro enterprises.
The regulations specify the insurance branches in which licensed microinsurance companies may operate. These include personal insurance and savings schemes such as life insurance, personal accident insurance, and long-term medical insurance, as well as property and liability insurance, including fire insurance, land, river, and sea transport insurance, fishing vessel insurance, supplementary vehicle insurance, engineering risks insurance, agricultural insurance, miscellaneous accidents, non-payment risks, and short-term medical insurance, in addition to any other branches approved by the authority.
The decision also outlines detailed standards for microinsurance products, requiring simple and easily understandable policy wording, clear and transparent marketing materials, flexible premium payment methods, and prompt compensation disbursement.
It emphasizes the use of modern technology in distribution, premium collection, and claims settlement, introduces simplified mechanisms for handling customer complaints, and stipulates that policyholders must not be charged any fees beyond premiums and legally mandated charges.
In terms of underwriting and claims settlement, the regulations require insurance companies to adopt approved underwriting policies tailored to the characteristics of target groups, apply sound technical pricing principles to ensure fair premiums, and identify appropriate marketing and distribution channels while verifying customer data.
Claims must be settled swiftly, with claim decisions issued within five working days of document submission and compensation paid within two working days of claim approval.
The FRA also identified the entities authorized to market and distribute microinsurance policies digitally.
These include licensed digital insurance brokers, banks registered with the Central Bank of Egypt (CBE), Nasser Social Bank, Egypt Post, telecommunications companies, the Agricultural Bank of Egypt, and companies, associations, and non-governmental organizations licensed to conduct microfinance activities.
Insurance companies will be required to submit quarterly reports to the FRA detailing their microinsurance activity, including the number of issued policies, collected and outstanding premiums, paid claims, commissions, and types of insurance offered.
The decision also mandates the development of financial literacy initiatives and insurance awareness programs targeting eligible groups.
Existing insurance companies have been granted a six-month grace period to comply with the new requirements.
The decision repeals any conflicting regulations and will come into force the day after its publication in the Official Gazette.
In mid-December, the FRA approved the establishment of Sawa Company as Egypt’s first dedicated microinsurance company, as part of the implementation of the Unified Insurance Law and its executive regulations.
The authority also recently issued a decision raising the maximum insurance coverage limit for microinsurance activity to EGP 390,000.
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