Credit Checks Now Mandatory for High-Value Life Insurance Policies

Egypt's Financial Regulatory Authority (FRA) has introduced new underwriting rules requiring credit inquiries for applicants seeking individual life insurance policies worth EGP 10 million or more, or the equivalent in foreign currencies, as part of updated risk management standards.

Insurance companies have been given three months to bring their underwriting practices into line with the new regulations.

Under the decision, insurers must conduct credit checks through licensed credit bureaus when an applicant's declared income, job or occupation does not correspond with the value of the policy or the premiums being paid, or when there are doubts about the legitimacy of an application.

The updated standards also require companies to verify applicants' identities, confirm the authenticity of submitted documents and obtain accurate health and financial information before issuing policies.

In addition, insurers must establish internal systems to detect unusual application patterns, identify repeated insurance of the same risks and assess whether policy values and benefits are proportionate to an applicant's income and comparable risks within the same geographic area. The measures are intended to strengthen fraud prevention and improve risk management across the sector.

The FRA also requires insurers to report any suspected fraud immediately upon its detection during the underwriting process for individual life insurance policies.

The new standards must be incorporated into each company's underwriting policies and build on risk management requirements previously outlined by the authority in a 2024 regulatory circular.