Egypt’s Financial Regulatory Authority (FRA), chaired by Dr Mohamed Farid (pictured), has introduced new investment regulations for private insurance funds, expanding permissible asset classes and adjusting reporting requirements.
The changes, issued under Decree No. 269 of 2024, are part of ongoing efforts to enhance oversight and align with the Unified Insurance Law.
Enacted in July 2024, the law consolidates Egypt’s insurance regulations into a single framework, aiming to modernise the sector and promote broader insurance coverage.
Under the new framework, defined benefit (DB) funds can now invest in mineral-backed financial instruments, venture capital funds, and direct equity holdings for the first time. Additionally, all private insurance funds must now file quarterly reports with the FRA, detailing investment portfolios and financial holdings.
Private insurance funds are independent legal entities that provide supplementary financial benefits to employees, such as retirement pensions, social benefits, and healthcare coverage. The latest decree sets new investment thresholds that funds must meet within six months.
The decree imposes minimum and maximum investment limits across various asset classes:
Additionally, non-invested cash balances in current accounts must not exceed 5% of total assets, except for temporary increases of up to 30 days with FRA approval.
The decree also modified investment governance rules for defined contribution (DC) funds. Boards of directors now have greater authority in setting investment policies, provided they secure FRA approval before implementation. If the fund has a corporate sponsor, policies must also be reviewed by the sponsor.
Investment policies must consider:
DC fund members will have the option to select investment or savings plans, with the ability to modify their choices over time. Alternatively, they may authorise fund managers or sponsors to make selections on their behalf.
Funds must also establish digital platforms that provide real-time access to contribution balances and investment returns. These systems may be managed by third-party investment firms or administrative service providers.
All private insurance funds are now required to submit quarterly reports to the FRA, detailing:
The FRA SAID IT reserves the right to request additional disclosures beyond the specified requirements.
Private insurance funds must adjust their portfolios within six months to comply with the new regulations. Existing holdings that exceed revised limits may be maintained, but no further investments can be made in those assets.
In a separate measure, the FRA has standardised the fiscal year for private insurance funds, insurance companies, and reinsurance firms.
Decrees No. 256 and 273 of 2024 establish Jan. 1 to Dec. 31 as the fiscal year for all entities, effective Jan. 1, 2025.
The decision addresses inconsistencies in fiscal reporting periods between domestic and foreign firms, which previously caused procedural delays. Insurance and reinsurance companies have been granted a one-time extension to submit financial statements by March 13, 2025.
Private insurance funds with a July 1 fiscal start date must prepare transitional financial statements covering July 1, 2024, to Dec. 31, 2024. These must include comparative data from the corresponding period in 2023.
Annual financial statements covering Jan. 1, 2025, to Dec. 31, 2025, must include prior-year comparative figures and undergo independent audits.
For insurance and reinsurance firms, the FRA now requires quarterly financial statements beginning in 2025, audited in accordance with Egyptian Accounting Standards. These statements must be submitted to the FRA within designated timeframes.
