The Egypt Financial Regulatory Authority has issued new rules governing licensed takaful insurance companies in Egypt, replacing the previous framework with an updated regime under the Unified Insurance Law. The main change is the introduction, for the first time, of an integrated model that combines wakala and mudaraba for managing the participants’ fund and investment activity, alongside standalone wakala and standalone mudaraba models. Under the combined model, the company manages insurance operations as an agent for a fee and investments as a mudarib for a share of investment returns. The rules set a detailed framework for takaful policy documentation, the contractual relationship with participants, surplus distribution, Sharia-compliant investment policies, and the treatment of deficits. They require reserves including a deficit coverage reserve and a claims fluctuation reserve, set alternative methods for distributing underwriting surplus at financial year-end, and prohibit distributing that surplus to shareholders. Deficits in the participants’ fund may be covered through reserves, an interest-free loan from shareholders, or by charging participants, while the company remains responsible for any deficit caused by negligence. The decision also requires an independent Sharia supervisory committee of at least three members, the appointment of a Sharia auditor, full separation of shareholder and participant accounts, disclosure of accounting policies, surplus and deficit treatment and any Sharia breaches, and rules for handling non-compliant income, including the option to establish a zakat fund. Takaful insurers must place reinsurance with takaful reinsurers, but may use conventional reinsurers with the authority’s approval where capacity is insufficient or the relevant risk is not covered. The decision repeals the previous takaful regulatory framework issued in 2019 and will take effect on the day after its publication in the Egyptian Gazette.
Egypt Financial Regulatory Authority 2026-05-10
Egypt Financial Regulatory Authority issues new takaful insurance rules allowing a combined wakala and mudaraba operating model
The Egypt Financial Regulatory Authority has issued new rules for licensed takaful insurance companies under the Unified Insurance Law, replacing the 2019 framework and introducing an integrated wakala–mudaraba model alongside standalone models. The regime sets requirements for policy documentation, surplus and deficit treatment, reserves, Sharia-compliant investment, governance and disclosure, including an independent Sharia supervisory committee, a Sharia auditor, separation of shareholder and participant accounts, and rules on reinsurance placement with takaful or, subject to approval, conventional reinsurers.