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For the First Time in Egypt, EFSA Launches Micro-insurance System - Wednesday 2/11/2016

• Sherif Samy: Micro-insurance will provide coverage for new segments in the society
• EFSA issues the regulations that will govern micro-insurance and electronic issuance and distribution of its policies
• Micro-insurance will protect low-income individuals from dangers and will be a saving tool
• EFSA: Entities operating in micro-finance will play an important role in spreading insurance

For the first time in Egypt, EFSA issues a decision that regulates micro-insurance. Also, the said decision set the rules that govern the issuance and distribution of electronic policies. This is an important step that will ensure the fact that insurance services will cover new segments in the society and it will be an addition for Egypt’s effort in achieving the financial inclusion.

Sherif Samy - EFSA’s Chairman emphasized that the decision defines micro-insurance as any insurance service that targeted low-income individuals to protect them against dangers that they can face by paying certain installments that suits the nature of the danger, and this includes property and life insurance.  He added that this includes branches stated in this decision and in all cases the value of the policy shall not exceed 100 thousands EGP.

He pointed out that after consulting international experts and the Union of Insurance Companies, decision no.902  was issued where it defined  micro-insurance branches to include life insurance, accidents , long–term medical insurance and also, it includes property insurance namely, petrol , car, aviation, Marine Hull & Machinery ( except fishing boats ) and Transportation insurance and its liabilities.
Sherif Samy revealed that the content of the policy shall be simple and shall not include difficult terminologies. He added that there must be a wide network to distribute the insurance policies, collect installment and pay compensations, and it must be close to the clients who are low-income individuals. In this respect, EFSA allows the electronic issuance of policies through Network Information System; also, it allows the issuance and distribution of the policies through insurance companies and NGOs which are licensed to practice micro-finance in addition to Egypt Post and banks after gaining the approval of the Central Bank.

He noted that it is expected that entities operating in micro-finance from companies and NGOs will play an important role in distributing micro-insurance policies due to its wide spread all over Egypt and large number  of beneficiaries. It is worth mentioning that the number of clients increased in these associations to reach 100 thousand.

Magdy Elgazzar – Head of Central Department for Certifying Financial Products asserted that the period of notifying the company of the danger shall be stated in the policy and it shall not exceed two weeks from the date of notification. He added that the company shall settle the claim within a period of no more than 10 working days from submitting the needed documents.

  He pointed out that the decision stated that the validity of the insurance coverage is linked to the payment of the first installment by the client through deducting the amount from his account or depositing it in the account of the entities which is being assigned by EFSA to issue and distribute the E-insurance policy. In addition, the policy shall state that there is no need for the signature of the insured.

EFSA’s Chairman noted that regulating and supporting micro-insurance will promote micro-finance initiative and it will be in the interest of the citizen especially owners of small enterprises and farmers.