Egypt's Financial Regulatory Authority (FRA) has mandated consumer finance companies to insure clients against death and total permanent disability, aiming to bolster protection for non-banking financial service users. The requirement covers clients up to age 65, with coverage equal to the outstanding loan balance.
The Financial Regulatory Authority (FRA) in Egypt has issued Board Decision No. 28 of 2026, requiring consumer finance companies to provide insurance coverage for their clients. This measure seeks to enhance protection for users of non-banking financial services, promote financial and social stability, and foster integration in the non-banking financial sector.
Under the decision, companies must insure clients obtaining financing up to age 65 against death from any cause and total permanent disability, with the insured amount matching the outstanding financing balance. Coverage for clients over 65 is permitted upon agreement between the insurance company and the finance provider.
The decision also requires life insurance and capital formation companies to use a unified insurance contract template for covering consumer finance clients, exempting these contracts from prescribed service fees. A six-month grace period is granted for companies to align with the new rules.
In the unified contract, the consumer finance company serves as the policyholder, and the life insurance company as the insurer. Coverage applies to all clients in approved statements from the finance company, with automatic acceptance without individual underwriting. Upon death or total permanent disability, the insurer must settle the amount—equivalent to the remaining balance—within five working days of receiving required documents, including a copy of the client's national ID, death certificate or accredited medical report, and an account statement of the outstanding debt.
Total permanent disability is defined as a condition preventing the insured from working permanently for at least six consecutive months without medical improvement. Covered incidents include total loss of sight or complete paralysis of both limbs. Exclusions cover risks from crimes committed by the beneficiary, nuclear radiation exposure, or pre-existing HIV infections before policy issuance.
The decision states that economic courts have jurisdiction over disputes related to the contract's implementation or interpretation. The insurance contract is void in cases of proven fraud or material false statements.