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General
Information
The
Insurance Supervision and Control in Egypt
Act
No. 10 of 1981 As Amended by Act No. 91 of 1995
Chapter
Ten
Examination of the Companies Transactions
Article
59 - Without
prejudice to the Authority's right of inspecting the books and records
under article 51 of this Act, the Authority has to carry on periodical
examination of insurance and reinsurance companies to ensure the soundness
of the company's financial position, compliance with the provisions of the
Act and technical bases to carry on insurance and reinsurance business.
The
Authority may make comprehensive examination of the company's business if
it has the causes to which it believes the rights of policyholders are at
stake or that the company will be unable to meet its liabilities or its
conduct of business proved that it is harmful to the insurance market or
it contravened any of the provisions of this Act
This
examination may also be carried out at the request of a number of
shareholders representing not less that one tenth of the capital or by not
less than five hundreds of policyholders of life assurance and capital
redemption whose policies have been issued not less than three years ago.
The
company shall furnish the Authority with any information, data, or
documents it demands during the examination.
The
examination shall be carried out according to the conditions and
procedures of the executive regulation of this Act.
If
the company's examination proved that the rights of policyholders are at
stake or that the company is exposed to inability to meet its liabilities
or that its business attitude proved to be harmful to the insurance market
or that the company has contravened any of the rules of this Act the board
of the Authority is authorised to take the corrective action and in
particular :
a)
To warn the company.
b) To limit the company's acceptance of new business, or
renew its existing business in respect
of all or some classes of insurance which the company
is authorised to transact.
c) To oblige the company to prepare the financial
statements and annual accounts for periods
less than a year.
d) To invite the board of directors of the company to
study and to take the required action to
eliminate the irregularities attributed to the company,
in such case a representative of the
Authority or more shall attend the meeting of the
board.
e) To appoint a controller in the board of directors of
the company for a period determined by
the board of directors of the Authority.
The controller shall have the right to share the discussions of the board,
and to express his views in the presented issues without having voting
counted.
f)
To allocate the distributable surplus to the shareholders or part of it to
strengthen the net
assets of the company.
g) To amend the investment policies and reinsurance
arrangements of the company.
h) To separate one or more of the executives of the
company.
i) To disintegrate the board and appoint a delegator to
run temporarily the company until the
appointment of the new board.
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