RepealOther

Requirements for Persons with Significant Influence in an Insurer (Directives No. 105/2020)

National Bank Of Ethiopia104/2020

Summary

This directive establishes the requirements for obtaining and maintaining a license to operate as an insurance agent in Ethiopia. It outlines general qualifications for natural and juridical persons, financial requirements, necessary documentation, training mandates, fees, renewal procedures, and the maintenance of professional indemnity insurance. It also repeals a previous directive (SIB/18/1998).

Who's affected

Individuals and companies seeking to become licensed insurance agents, and existing insurance agents.

Action required

Individuals and companies intending to act as insurance agents must meet the specified educational, experience, training, and financial requirements, and submit a complete application with supporting documents to the National Bank of Ethiopia. Existing agents must ensure their licenses are renewed annually and maintain a valid professional indemnity policy.

Key points

8
  • Defines 'Insurance Agent' and 'The Bank'.
  • Specifies eligibility criteria for natural and juridical persons.
  • Details financial requirements (deposits/indemnity insurance).
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    • Mandates specific training and continuing education.
    • Outlines application, renewal, and fee structures.
    • Requires maintaining a professional indemnity policy.
    • Repeals Directive No. SIB/18/1998.
    • Sets an effective date of January 1, 2008.

Requirements

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  • Natural persons must be Ethiopian nationals, have at least a secondary school education or equivalent, complete compulsory training or have five years of relevant experience, and not have been convicted of dishonesty offenses.
  • Juridical persons must be established under Ethiopian law, be fully owned by Ethiopian nationals, have their head office in Ethiopia, and their chief executive officer must meet specified education, training, and experience criteria. Owners and the CEO must not have been convicted of dishonesty offenses.
  • Applicants must deposit Birr 20,000 or maintain a professional indemnity cover of Birr 20,000 for a single line of business, or Birr 40,000 or a professional indemnity cover of Birr 20,000 for each line if applying for both general and long-term business.
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    • A duly completed application form with photographs, curriculum vitae, and details of previous employment are required.
    • Applicants must attend mandatory pre-licensing training.
    • Licensed agents must attend 30 hours of refreshment courses every five years.
    • An initial investigation fee of Birr 300 is required for new applications.
    • An initial license and subsequent renewal fee of Birr 250 is required.
    • A license must be renewed annually.
    • Renewal applications must be submitted within one month of the license expiry date.
    • Agents must maintain a valid professional indemnity insurance policy at all times.
    • A copy of the valid professional indemnity insurance policy must be filed with the Bank upon renewal.

Rights and permissions

3
  • The right to apply for an insurance agent license if all requirements are met.
  • The right to renew an insurance agent license annually upon meeting renewal conditions.
  • The right to apply for a new license after cancellation, provided all new agent conditions are satisfied.

Restrictions

10
  • Applicants must be Ethiopian nationals (for natural persons).
  • Applicants must meet specific educational and experience thresholds.
  • Applicants must pass a compulsory pre-licensing training or have significant prior experience.
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    • Applicants and their chief executives/owners must not have been convicted of dishonesty offenses.
    • Financial requirements (deposits or indemnity insurance) must be met.
    • Agents must attend refreshment courses periodically.
    • Licenses are subject to annual renewal.
    • Licenses can be automatically cancelled if a valid professional indemnity policy is not maintained.
    • Late renewal applications are subject to penalties.
    • Failure to renew within 12 months leads to automatic license cancellation.

Penalties

3
  • Late renewal applications are subject to a penalty of Birr 200.
  • Failure to maintain a valid professional indemnity insurance policy results in automatic license cancellation.
  • Failure to apply for renewal within 12 months of expiry results in automatic license cancellation, requiring a new application process.

Objectives

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  • To set forth the requirements for the licensing and supervision of insurance agents.
  • To ensure that insurance agents possess the necessary qualifications, training, and financial standing.
  • To protect policyholders and maintain the integrity of the insurance market.
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    • To replace Directive No. SIB/18/1998.

Organizations

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  • National Bank of Ethiopia

Legal references

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  • Article 41 of the Monetary and Banking Proclamation No. 83/1994
  • Article 25 and Article 42(j) of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994
  • Commercial Code of Ethiopia
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    • Directive No. SIB/18/1998 (repealed)
Original sourcehttps://justice.gov.et/en/directives/requirements-for-persons-with-significant-influence-in-an-insurer-directives-no-105-2020/
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