NewInvestment
Requirements for Licensing and License Renewal of Insurance Business (Directive No. 107/2020)
National Bank Of Ethiopia107/2020
Summary
This directive outlines the requirements for obtaining and renewing licenses for insurance businesses in Ethiopia, aiming to promote a strong and viable insurance sector.
Who's affected
Entities seeking to establish or maintain an insurance business in Ethiopia, including organizers, project managers, influential shareholders, directors, chief executive officers, senior executive officers, and existing insurance companies.
Action required
Entities must ensure they meet all specified pre-application, application, and operational requirements, including submitting all required documentation and fees, and adhere to the conditions for commencement of operation and license renewal.
Key points
5- Establishes clear requirements for obtaining and renewing insurance business licenses.
- Emphasizes integrity and transparency in the licensing process.
- Details extensive documentation needed for licensing, including business plans and financial projections.
- Outlines conditions for commencing operations and annual license renewal procedures.
- Repeals specific articles of previous directives.
Show 2 more
Requirements
7- Appointment and qualifications of a project manager.
- Integrity and diligence of organizers and project manager.
- Pre-application documentation (trade name registration, minutes, prospectus, application forms, investigation fee payment).
- Application phase documentation (paid-up capital evidence, subscriber meeting minutes, founder share list, articles/memorandum of association, property ownership/lease, insurance coverage for premises, related party transactions disclosure, influential shareholder information, business plan, specimen policies, premium rates, re-insurance policy/program, licensing fee payment).
- Conditions for commencement of operation (comprehensive policies for HR, investment, liquidity, internal audit, MIS, planning, finance, risk management, corporate governance, crime detection, outsourcing, marketing, underwriting, claims, re-insurance, procurement; adequate staffing; suitable operating environment; specific insurance coverage).
- Display of valid business license.
- Annual license renewal with required documentation and fees/penalties.
Show 4 more
Rights and permissions
2- The right to apply for and obtain an insurance business license.
- The right to renew an existing insurance business license.
Restrictions
7- Organizers and project managers must be honest, reputable, and diligent.
- Specific educational and experience requirements for project managers.
- Restrictions on individuals with past criminal convictions, dishonesty, fraud, or non-compliance with regulatory bodies.
- Requirements for paid-up capital, shareholding disclosure, and business plans.
- Restrictions related to related party transactions.
- Conditions for commencement of operations must be met before commencing business.
- Licenses must be renewed annually.
Show 4 more
Penalties
1- Failure to comply with requirements may lead to penalties, including potential refusal of license or renewal (implied through renewal requirement of 'evidence of payment of renewal fee and/or penalty').
Objectives
3- Promote a strong and viable insurance sector in Ethiopia.
- Ensure the safety and soundness of the insurance sector through proper licensing and supervision.
- Establish clear, objective, and transparent requirements for licensing and renewal.
Organizations
3- National Bank of Ethiopia
- Ministry of Trade
- Regional Trade Bureau
Legal references
2- Insurance Business Proclamation No. 746/2012 (Articles 4(1), 4(4), 58(2))
- Licensing and Supervision of Insurance Business Directives No SIB/1/1994 (Articles 1-3 and 6 repealed)
Original sourcehttps://justice.gov.et/en/directives/requirements-for-licensing-and-license-renewal-of-insurance-business-directive-no-107-2020/
View source