Egypt Insurance Market 2016
Supervision All new policy wordings and significant changes to existing wordings must be submitted to the supervisor for approval. If no questions are raised, this is considered as granted after 30 days. If changes are suggested, the approval process may take six months or more.
It has been suggested that wordings for some specific risks may have been used without seeking authorisation and the supervisor has raised no objections as they were not for general use by the company or the market. Some sources say that submission is important as if wordings are used without approval, the supervisor can levy a fine of several times the policy premium.
Although Law No 10 of 1981, Law on Insurance Supervision and Control in Egypt, stipulated the submission of rates and conditions with policy wordings as part of the insurance company registration process, the requirement to file rates never appears to have been enforced and is not currently a feature of the market.
The normal policy language is Arabic but policies may be issued in English or other foreign languages provided that a translation into Arabic exists. In the event of any dispute, the Arabic version will prevail. Business may be written on a variety of forms, including UK, US and broker manuscript wordings, provided that they have been approved in advance by the supervisor. These types of wordings are common for foreign clients.
There are no non-standard exclusions specific to the Egyptian market.
In recent years the insurance association (IFE) has become more active in preparing policy wordings for submission to the supervisor on behalf of the market, although companies remain free either to use these once approved or file their own wordings. It is the IFE's aim to review all policy wordings at least every five years.
Wordings have been prepared in Egypt for all classes except marine, where London Institute clauses are used, and engineering where they are straight translations of Munich Re wordings.
Law Local insurance legislation makes no reference to concepts such as subrogation, arbitration and non-disclosure but the market follows the standard wordings and practice of western markets, especially that of the UK. Arbitration and non-disclosure are thus standard in all policies and subrogation and innocent misrepresentation clauses are also usually found. The jurisdiction established in local policies is Egypt.
Neither legislation nor the policy wordings contemplate any cooling off period.
There is no legal requirement to provide legal costs in addition to liability policy indemnity limits.
Types of Policy
Most property policies are on a named perils basis but some industrial all risks cover is also written, especially for foreign clients as part of global packages. Package policies also exist in the form of household comprehensive, small commercial and hotel policies with a range of covers.
The average clause is usually included in property policies. Although there is no legal impediment to its deletion, it is not common practice to do so especially as underinsurance is a feature of the Egyptian market, with many insureds opting to insure for book value, the amount of a bank loan or similar.
Indexation of sums insured is not commonly found in the market.