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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
Five
The Establishments of Insurance and
Reinsurance
A
) Insurance and Reinsurance Companies
Article 17 - Under the provisions of this Act the term
insurance and reinsurance companies means the joint stock companies
authorized to transact insurance and reinsurance business whatever its
instrument of establishment and shall be referred to in this Act as the
"company".
Article
18 - With the exception of the provisions of this Act, the
provisions of Act No.60 of 1971 for the public sector organizations and
affiliated companies shall apply to the insurance and reinsurance
companies which are deemed public companies according to its provisions.
However,
insurance and reinsurance companies not considered public companies are
subject, with the exception of what is specified in this Act, to Act No.26
of 1954, on the joint stock and limited companies with the exception of
articles 24 (2) 30, 33, 33 (b). Moreover, there shall be no circulation of
the portions of incorporation and the shares within the first two years of
the company without the consent of the board of directors of the
Authority.
Article
19 - Each company
shall have a board of directors formed according to the Act applied to it
and the chairman is to represent the company in Courts and in its relation
with other parties.
Article
20 - The board of directors of a company controls and runs
its affairs. It shall set up the company's insurance and investment plan
and supervise its implementation. It is entitled to issue the decisions it
sees fit to guarantee the achievement of the company's objectives within
the framework of this Act. The board has in particular the power to:
1
- Carry on insurance and reinsurance business in accordance with the
decision of the
company's establishment and authorization
issued by the Authority.
2 - Contribute to the development of savings and financial investment.
3 - Participate in the establishment of enterprises and companies in the
different spheres of
economic activity within the framework of the
state's national plan.
4 - Approve the draft of the general plan, the annual accounts and the
balance sheet in
preparation for submitting them to the
general meeting for sanction
5 - Approve the organizational structure.
6 - Issue the financial technical and administrative systems and
regulations including those
related to the company's staff, their
salaries, wages, remunerations, benefits, special
allowances, at home and abroad per diems and
incentive systems.
The
board of directors of public companies shall not be bound in issuing its
directives in accordance with item (5 & 6) to the rules and
regulations specified in Act No.60 of 1971 of public sector organizations
and affiliated companies and Act. No 48 of 1978 of the system of public
sector personnel provided that the principles shown below shall be
applied:
First
: Linking the wages with performance.
Second : The rules of the
social insurance system according to Act No.79 of 1975.
Third : No
contravention to the staff unions participation as stipulated in the Acts.
Article 20 (bis) - The general meeting of each insurance
and reinsurance company subordinate to the public sector is formed under
the chairmanship of the competent minister or his representative and with
the membership of each of :
a)
The chairman of the board of directors of the Insurance
Supervisory Authority.
b) A representative of each
of the Ministry of Finance, Ministry of Planning and Ministry of
Economic and Foreign Trade.
c) The chairmen of the other
public insurance and reinsurance companies.
d) Four employees of the
company, other than the board members, chosen by its trade union
e) Members who have
experience in the company's business not exceeding four nominated by
the competent minister.
The
chairman of the company, the board members and the auditors from the
Central Organization of Accounting attend the general meeting without
having voting counted.
The
resolutions of the general meeting are passed by a majority of the members
present and voting except cases which require obtaining a special majority
under the provisions of the Act and the memorandum of association of a
company.
Article
21 - The net profits of the public companies shall be
transferred to the treasury after deducting the estimated reserves,
provisions and the staff share of the profits.
The
general state budget shall not include the resources and current and
capital expenditures of these companies.
B) Co-aperative Insurance Societies.
Article 22 - A co-operative insurance society is one which
is formed within the framework of the general rules of co-operation and
provide that the value of shares or its capital portions at the
establishment and the paid up capital are not less than the amount
specified in the executive regulation of this Act
The
Authority shall register and authorize these organizations to carry on
their activities under its supervision and control.
The
mutual organization acquires the legal entity when it is registered in the
prescribed register at the Authority.
The
executive regulation shall define the necessary rules and conditions for
the establishment, registration and the technical bases of these
societies.
C)
Private Insurance Funds
Article 23 - under the provisions of this Act, a private
insurance fund means every system in a body corporate, trade union or a
society composed of members of one profession or the same work or having
any other social relation. This system is formed without a capital,
financed by subscriptions or other means with the view of granting its
members, or beneficiaries, certain insurance rights in the form of
compensations or periodical pensions or specified financial benefits.
These
Funds are subject to the provisions of the Private Insurance Funds Act
No.54 of 1975
D) Governmental Insurance Funds
Article 24 - This term means
the Funds that transact the insurance of risks not normally acceptable by
insurance companies or those which the government decides to undertake by
itself.
The
governmental Insurance Fund shall be set up by the Prime Minister's
decree. Rates and conditions of the Insurance transactions mentioned above
shall be fixed by the competent minister's decree through the proposal of
the board of the Authority.
The
executive regulation of this Act includes the provisions regulating the
Authority's supervision and control aspects of these Funds.
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