Regulatory Alerts2023-04-25
Added · Updated
Licensing, License Renewal and Product Approval for Microinsurance Providers Directive No. SMIB/3/2020
The National Bank of Ethiopia establishes licensing, renewal, and product approval requirements for microinsurance providers, including insurance companies, microinsurance companies, and microfinance institutions. Microinsurance companies must hold paid-up capital of Birr 7 million for general products, Birr 3 million for life products, or Birr 10 million for both, while microfinance institutions must set aside equivalent additional reserves or capital to operate microinsurance units. The directive mandates fit and proper criteria for directors and senior officers, requiring specific educational qualifications and years of experience, and imposes a capital adequacy rating of at least 3 for existing insurers and microfinance institutions seeking to offer microinsurance. Product approval is required before commencement, and providers must label all policies with the word "MICROINSURANCE" and maintain separate business units and accounts.