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SIB/62/2026 LICENSING OF INSURANCE BROKER
National Bank of EthiopiaSIB/62/2026
Summary
This directive outlines the requirements and procedures for licensing insurance brokers in Ethiopia, including establishment, qualifications, responsibilities, and penalties for non-compliance.
Who's affected
Individuals and limited liability partnerships seeking to operate as insurance brokers in Ethiopia.
Action required
Entities intending to operate as insurance brokers must review the licensing requirements, ensure they meet the specified conditions, and submit the required documentation to the National Bank of Ethiopia.
Key points
9- Defines 'insurance broker', 'chief executive officer', and other relevant terms.
- Specifies establishment requirements (sole proprietor or limited liability partnership).
- Details educational and experience requirements for key personnel.
- Mandates professional indemnity insurance with specific minimum coverage.
- Outlines duties and responsibilities of insurance brokers.
- Prohibits certain equity interests for relatives of brokers.
- Establishes procedures for license renewal, suspension, and revocation.
- Provides transitional arrangements for existing brokers.
- Repeals Directive No. SIB/31/2010 and Directive No. SIB/009/1995.
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Requirements
13- Must be an Ethiopian national or a limited liability partnership fully constituted by Ethiopian nationals.
- Must not have been convicted of an offense involving dishonesty.
- Must possess honesty, integrity, diligence, and reputation.
- Chief executive officer must meet specific educational and experience criteria.
- Partners in a limited liability partnership must meet specific educational and experience criteria.
- Must provide professional indemnity insurance policy.
- Must submit photographs of the proposed chief executive officer.
- Must submit curriculum vitae and supporting documents for educational qualification and work experience.
- Must complete the prescribed application form.
- Must provide the full address of the principal place of business.
- Must maintain records of client and policy information.
- Must maintain a valid professional indemnity insurance cover at all times.
- License renewal requires evidence of fee payment and a valid professional indemnity policy.
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Rights and permissions
4- Clients have the right to seek redress from a broker for damages suffered due to the broker's failure to disclose material facts to an insurance company.
- Brokers can place business with an insurance company of the insured's choice if the insured provides a written statement.
- Brokers can collect premiums and settle claims up to a pre-agreed limit, subject to agreement with the insurance company.
- Brokers can issue cover notes.
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Restrictions
6- Spouse or first-degree relatives of sole proprietor/CEO/partner cannot have equity in an insurance company, loss-adjusting firm, or actuary firm.
- Renewal applications must be submitted within one month of license expiry.
- Failure to apply for renewal within 12 months results in automatic license cancellation.
- License suspension can occur if the firm lacks a CEO for over four months or due to investigation findings.
- License revocation can occur for serious breaches of duties, violation of regulations, detrimental acts to the industry, or conducting business contrary to good faith and client interests.
- Automatic license cancellation for failure to maintain professional indemnity insurance.
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Penalties
1- A fine of Birr 10,000 for failure to comply with directives or Insurance Business Proclamation.
Objectives
3- To specify the manner of conducting business for insurance brokers.
- To ensure brokers play a professional role in assisting clients with insurance procurement and administration.
- To establish clear licensing procedures for insurance brokers.
Organizations
4- National Bank of Ethiopia
- Insurance companies
- Loss adjusting firms
- Firms of actuary
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Legal references
3- Insurance Business Proclamation No. 746/2012
- Insurance Business (Amendment) Proclamation No.1163/2019
- Commercial Code
Original sourcehttps://nbe.gov.et/files/sib-62-2026/
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