The Egypt Financial Regulatory Authority has amended the controls governing the investment of funds earmarked by insurance and reinsurance companies, tightening the time allowed to remedy any insufficiency in those funds against obligations to policyholders and beneficiaries. Under the amendment issued through FRA Decision No. 3 of 2026, where earmarked funds are found to be insufficient, the company must first cover the shortfall from its free funds. If free funds are also insufficient, the firm is granted three months to submit a plan to address the deficit, with the period now calculated from the financial position in which the deficit appeared rather than from the date the FRA notifies the company. The previous rule allowed six months from the FRA notification date. The release reiterates that earmarked funds are amounts mandatorily set aside within the insurer to meet direct obligations to policyholders, while free funds are non-earmarked resources such as equity, retained earnings, or general reserves.
Egypt Financial Regulatory Authority 2026-02-08
Egypt Financial Regulatory Authority cuts to three months the deadline for insurers to address earmarked-fund shortfalls
The Egypt Financial Regulatory Authority revised rules for insurance and reinsurance companies' earmarked fund investments, reducing the time to address fund insufficiencies from six to three months. Under FRA Decision No. 3 of 2026, companies must first use free funds to cover shortfalls, with the new timeframe starting from the financial position date of the deficit. Earmarked funds are for policyholder obligations, while free funds include equity and reserves.