The Chairman of Egypt’s Financial Regulatory Authority (FRA), Dr. Mohammed Omran, has announced that the Authority’s Board of Directors recently approved the suspension of new licenses for insurance and reinsurance brokers.
The decision sees the suspension of granting any new licenses for a year, and, comes after a study conducted on the country’s re/insurance market found that the number of companies licensed to engage in brokerage activity is “sufficient and exceeds” the current demand for services.
The FRA Chairman noted that increasing the number of companies operating in the same area could ultimately damage the industry.
After the introduction of Law No. 118 of 2008, the FRA, for the very first time, permitted the practice of insurance brokerage activity for legal persons alongside natural persons.
The FRA granted the first license for an insurer to engage in broking activities in February 2009, with the number of licensed brokers now standing at 90 in the country, split 81 insurance brokers and nine reinsurance brokers.
“Dr. Omran emphasized that the decision to suspend granting any new licenses to insurance or reinsurance brokerage firms was issued out of the Authority’s responsibility to work on developing non-banking financial activities, including insurance activity, through continuous monitoring of the actual practices of the activities of insurance brokerage companies in Egypt and assessing its establishment and licensing to practice activity in the Egyptian market during the past ten years,” explains the FRA.
