For the First Time: Insurance Coverage for Consumer Finance Clients in Egypt
The Egyptian Financial Regulatory Authority (FRA) has mandated that companies engaged in consumer finance provide insurance coverage for their clients, in a move aimed at enhancing the protection of individuals interacting with non-banking financial services, supporting financial and social stability, and promoting integration within non-banking financial activities.
According to Decision No. 28 of 2026, issued by the FRA Board on January 22, 2026, consumer finance companies are required to insure clients obtaining financing up to the age of 65 against death from any cause and permanent total disability, with the insurance amount equal to the outstanding loan balance. The decision also allows insuring clients above this age subject to agreements between the insurance company and the finance company.
The decision obliges life insurance companies and those managing funds to use a standardized contract model for covering clients of consumer finance companies. These contracts are exempt from service fees, and insurance and finance companies are granted six months to comply with the new rules.
The standardized model specifies the contracting parties—the consumer finance company as the policyholder and the life insurance company as the insurer—and covers all clients listed in approved records, with insurance equal to the remaining loan balance up to age 65, and automatic acceptance of the insured.
In the event of death or permanent total disability, the insurance company must pay the insurance amount, equivalent to the remaining loan balance, within five business days of receiving the required documents, including a national ID copy, death certificate or medical report, and an account statement showing the outstanding balance.
Permanent total disability is defined as a condition preventing the insured from working permanently for at least six consecutive months without improvement, such as total blindness or complete paralysis of both limbs. Coverage excludes risks arising from crimes committed by the beneficiary, exposure to nuclear radiation, or pre-existing HIV conditions.
The decision confirms the jurisdiction of economic courts to resolve any disputes arising from the execution or interpretation of the insurance contract, while contracts found to contain fraud or materially incorrect information are considered null and void.