Egypt - Traditional insurers allowed to own takaful companies
Wednesday, 04 08 2020, Category: Islamic Insurance, Country: Egypt
Mainstream insurance companies are now allowed to be shareholders in their mutual guarantee or sharia-compliant “takaful” insurance counterparts, according to a decision by the Financial Regulatory Authority carried by Al Mal. The decision exempts takaful insurance companies from a stipulation in the 1981 Insurance Act that prevents insurers operating in Egypt from owning shares in their competitors.
The authority said that since the nature and process of takaful insurance is distinct, it should be treated as such. This will, on one hand, close a legal loophole stifling the sector’s growth and, on another, better equip takaful insurance players, who — having only appeared less than two decades ago — are relative newcomers to the industry, according to the FRA.
Move to support state-owned MIHC: The decision comes after state-owned Misr Insurance Holding Company (MIHC) set up a EGP 150 mn takaful insurance arm in partnership with the National Bank of Egypt. MIHC and two of its subsidiaries, Misr Insurance and Misr Life Insurance, hold a 52% stake in the new company.