Regulatory Alerts2022-03-01
Added · Updated
Prudential Requirements for Reinsurance Companies Directive No. SRB/2/2022
The National Bank of Ethiopia mandates that licensed reinsurance companies maintain a statutory deposit of 15% of paid-up capital and transfer at least 10% of net profit to a legal reserve until it equals paid-up capital. Reinsurers must hold admitted capital of no less than 20% of the preceding 12 months' net written premium and maintain a liquidity ratio of admitted current assets to current liabilities of at least 100%. Investment restrictions require at least 60% of total assets in Treasury Bills and bank deposits, with no more than 10% in rental real estate and 20% in company shares. Retrocession transactions must involve counterparties with minimum credit ratings of A- and BB, and final contracts must be executed within 45 days of coverage effectiveness.