Credit checks are coming to high-value life insurance policies

Individual persons ins. policies worth EGP 10 mn or more now carry a mandatory credit check on the applicant, under new risk-management standards from the Financial Regulatory Authority (FRA), according to an FRA statement. The standards — set in FRA chairman decision 2036 of 2026, published in the Official Gazette and updating a 2024 circular — also require ins’ers to pull an applicant’s credit record when their income, occupation, premiums, or requested cover don’t add up, or where there’s doubt about the legitimacy of the application.

The credit check is one piece of a wider underwriting test. Ins’ers must verify applicants’ identities and supporting documents, collect accurate health and financial data, and judge whether the requested cover and premiums are proportionate to the applicant’s income — and to comparable policies covering similar risks in the same geographic area of the ins’red. They also have to build internal systems to flag unusual application patterns and repeated cover of the same risks.

Detected fraud can’t sit. Any fraud or attempted fraud uncovered during underwriting has to be reported to the FRA as soon as it’s detected, and ins’ers must write the new standards into their formal underwriting policies.

OUR TAKE- The FRA looks to be stitching together a more integrated risk framework for the ins. market. Its recent reins. rules tightened how ins’ers assess capital, liquidity, risk appetite, and their capacity to handle claims. The push on anomaly detection and instant fraud reporting echoes a broader move toward data systems that catch fraud and leakage.

What's next: Ins’ers have until 16 October to bring their underwriting policies and systems into line — three months from the standards’ 16 July effective date.