Egypt’s Traditional Commercial Insurers can now Contribute Capital to Local Takaful Companies

The Financial Regulatory Authority (FRA) of Egypt has given authorization for conventional insurance companies to make capital contributions to their Shariah-compliant counterparts. 

The decision exempts Takaful companies from a stipulation in the 1981 Insurance Act that prevents insurers operating in Egypt from contributing capital to another insurance company engaged in similar activity. The FRA stated that the nature and processes of Takaful insurance made these companies distinct in relation to the work they do, relative to traditional commercial insurance.

The decision comes following the establishment of an EGP 150 million Takaful arm, Misr Takaful Insurance – Hayat, by...