The Egypt Financial Regulatory Authority has issued comprehensive underwriting, pricing and risk management controls for property and liability insurers licensed to provide credit and guarantee insurance, excluding domestic and export commercial credit and guarantee business. The measure, which advances the implementation of the Unified Insurance Law, requires the insured or credit provider to retain at least 25% of the outstanding insured financing and prohibits side agreements that reduce this exposure or alter approved coverage and claims terms. Insurers must adopt board-approved written underwriting policies, use technical and actuarial methods to set minimum premium rates, and assess creditworthiness using relevant default, debt burden, cash flow, liquidity, solvency and collateral indicators. Policies cannot be issued or renewed below the approved technical minimum. Pricing models must undergo annual back-testing and validation, while portfolios are subject to stress testing and scenario analysis at least every six months. The rules also impose internal concentration limits, including a 10% cap on exposure to a single customer or connected group, limits of 50% for business sourced from one bank and 30% from another single credit provider, and a 25% ceiling on credit and guarantee insurance premiums as a share of total company premiums, unless the Authority approves an exception. Reinsurance programs must reflect the portfolio’s risks and avoid unjustified material concentration with one reinsurer. Insurers must assign underwriting, pricing, claims and risk management responsibilities to suitably experienced personnel and align their operations within six months after the decision is published in the Egyptian Gazette. The controls will then apply to newly issued and renewed policies without affecting existing policies. The Authority plans further rules on technical definitions, professional qualifications, actuarial methods and default data, while the Egyptian Insurance Federation will prepare model policy terms for regulatory approval.
Egypt Financial Regulatory Authority tightens credit and guarantee insurance underwriting, pricing and concentration controls
The Egypt Financial Regulatory Authority has tightened underwriting, pricing and risk controls for credit and guarantee insurers, including a minimum 25% risk retention and new exposure concentration limits. Insurers must use board-approved underwriting policies and actuarial pricing floors, validate models annually and conduct stress tests at least every six months. Firms will have six months after gazette publication to comply, with the requirements applying to new and renewed policies thereafter.