Regulatory Alerts2020-08-17
Added · Updated
Amendment to Manner and Criteria of Transacting Reinsurance Directive No. SIB/53/2020
This Directive establishes reinsurance risk management requirements for all insurance companies, mandating board-approved policies and programs that include concentration limits, due diligence processes, and liquidity assessments. It sets specific retention thresholds of 5% to 10% of capital and reserves per risk, requires a compulsory cession of at least 25% of treaty cessions and 5% of each policy to licensed Ethiopian reinsurers, and imposes credit rating minimums of A- for lead and BB for follower reinsurers. The rules further regulate risk sharing schemes for exposures exceeding capacity by 30%, enforce strict accounting and documentation standards, and require submission of reinsurance programs and contracts to the National Bank within specified deadlines.