LICENSING AND SUPERVISION OF INSURANCE BUSINESS AMENDMENT OF OPENING OF BRANCHES Directive No. SIB/8/1995
Directive No. SIB/8/1995
LICENSING AND SUPERVISION OF INSURANCE BUSINESS AMENDMENT OF OPENING OF BRANCHES
These Directives amending Directives No. SIB/2/1994 are issued by the National Bank of Ethiopia pursuant to the authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 25 of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994.
The National Bank of Ethiopia Licensing and Supervision of Insurance Business Directive No. SIB/2/1994 is hereby amended as follows.
"4. Duty of the Bank
The Bank shall give a written response to the applicant within thirty calendar days from the date of receipt of the application and feasibility study under Article 3 hereof.
An insurer licensed to open a branch shall pay Birr 500.00 (Five Hundred Birr) for each licensed branch."
These Directives shall enter into force as of 22nd day of May 1995.
INVESTIGATION FEE TO BE PAID BY INSURANCE AUXILIARIES AND ACTUARIES National bank insurance business directive No. SIB/6/1994
Directive No. SIB/6/1994
LICENSING AND SUPERVISION OF INSURANCE BUSINESS
INVESTIGATION FEE TO BE PAID BY INSURANCE AUXILIARIES AND ACTUARIES
Theses Directives are issued by the National Bank of Ethiopia pursuant to the Authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 25 of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994.
An applicant applying for a license to undertake a business as an insurance auxiliary or an actuary shall pay investigation fee of Birr 300 (three hundred) to the National Bank of Ethiopia.
These directives shall enter into force as of 3rd day of November 1994.
_ Directive No. SIB/17/1998
LICENSING AND SUPERVISION OF INSURANCE BUSINESS
Manner of Reporting Financial Information
These Directives are issued by the National Bank of Ethiopia pursuant to the authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 42(j) of the Licensing and supervision of Insurance Business Proclamation No. 86/1994.
SUBMISSION OF REPORTS
Each insurer shall submit to the Supervision Department of the National Bank of Ethiopia separate quarterly reports for general and long-term insurance business within twenty days after the end of each quarter in the manner shown in the return formats attached herewith which shall form a part hereof.
General Insurance Business
For the purpose of reporting financial information:
Aviation Insurance Business shall mean the business of effecting and carrying out contracts of insurance:
upon the aircraft or upon the machinery, tackle or furniture or equipment of aircraft; against damage arising out of or in connection with the use of aircraft or against risks incidental to construction, repair or landing of aircraft, including airport owners' liability and third party risks;
against loss of life by accident or injury by accident to aircrew members whilst performing or deemed to be performing their duties in accordance with their employment but excluding contracts of insurance in respect of risks of aviation excess of loss or crew loss of license.
Engineering Insurance Business shall mean the business of effecting and carrying out contracts of insurance of various perils arising out of plant and machinery, such as explosion or collapse of boilers, breakdown of electrical or mechanical plant and lifts and cranes Machinery Break Down (MBD), and resultant damage to the insured's surrounding property and liability to third parties arising therefrom; it shall also include contracts of insurance in respect of Contractors' All Risks (CAR), Erection All Risks (EAR) and Machinery Break Down (MBD) and damage to property on site however caused and third party liability arising therefrom.
Fire Insurance Business shall mean the business of effecting and carrying out of contracts of insurance other than those incidental to some other class of insurance business, against loss of or damage to property due to fire, explosion, storm, flood, and other occurrences customarily included among the risks insured against in fire insurance polices; it shall also include burglary, glass, all risks, householder's insurance.
Industrial Life Assurance Business shall mean the business of effecting assurances on human life, premiums in respect of which are payable, at intervals, to collectors sent by the insurer to each holder of a policy or to his residence or place of work.
Ordinary Life Assurance Business shall mean life assurance business, being business of, or in relation to, the issuing of or the undertaking of liability under ordinary life polices. Ordinary life policy means a policy of life assurance other than a policy of industrial life assurance.
Superannuation Business shall mean life assurance business, being business of, or in relation to, the issuing of or the undertaking of liability under superannuation, group life and permanent health insurance polices:
that is vested in the trustees of a fund established or maintained by a person, being a fund the terms and conditions applicable to which provide for:
the payment of contributions to the fund by that person; and
Payments being made from the fund, on account of injury, sickness, retirement or death of the employees of that person or a company in which that person has a controlling interest; or
effected for the purposes of a superannuation or retirement scheme; or
accepted by the person maintaining such a scheme for the purpose of the scheme.
For the purpose of reporting financial information:
The inception date, i.e. the date on which liability of an insurer begins under a contract of insurance, shall be the date for recognition of premiums. Where an insurance contract provides permanent open cover, each anniversary date of the contract shall be deemed the inception date.
Premiums shall be shown net of discounts, refunds and rebates.
Amounts of commission which may include brokerage fee or other remuneration paid to intermediaries shall be separately shown under appropriate headings and shall not be deducted from premium amounts.
Claims amounts shall include claims expenses and provisions for outstanding claims shall include provisions for Incurred But Not Reported (IBNR) claims.
Premiums, claims, surrenders, annuities and commissions shall be shown net of reinsurance transactions related thereto.
Reserves for Unearned Premiums in respect of each class of general insurance business shall be computed on the basis of the one-twenty fourth method.
Reserves for Incurred But Not Reported (IBNR) claims in respect of each class of general insurance business shall be 10% (ten percent) of net earned premium. where an asset which is encumbered is included in the balance sheet, particulars of such an asset, the nature of the encumbrance and the amount secured by the encumbrance shall be attached to the balance sheet.
Particulars of all contingent liabilities other than liabilities under contracts of insurance shall be attached.
5. REPORTING PERIOD
For the purpose of reporting financial information,
First Quarter shall mean the period running from July 1 to September 30, Second Quarter shall mean the period running from October 1 to December
31, Third Quarter shall mean the period running from January 1 to March 31, Fourth quarter shall mean the period running from April 1 to June 30 of each financial year.
These Directives shall be effective as of the 11th day of May 1998.
_ Directive No. SIB/9/1995
INSURANCE BROKERS CODE OF CONDUCT
This Directive may be cited as The Insurance Brokers Code of conduct Directive No. SIB/011/1995
These Directives are issued by The National Bank of Ethiopia pursuant to the Authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 42 (j) of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994.
'Insurance Broker' shall mean a person duly licensed as Insurance Broker in accordance with directive No. SIB/3/1994;
'Insurer' means a person or body of persons carrying on Insurance business;
'Advertisements' or 'Advertising' means canvassing, the offer of services or other methods whereby business is sought by Insurance Brokers.
This Code of Conduct shall serve as a guide to Insurance Brokers and other persons concerned with their conduct but the mention or lack of mention in it of a particular act or omission shall not be taken as conclusive of any question of professional conduct.
The objective of this Directive is to assist in establishing a recognized standard of professional conduct required of all Insurance Brokers who should, in the interests of the public and in the performance of their duties, bear in mind both this objective and the underlying spirit of this Code.
Matters which might relate to acts or omissions amounting to negligence will be dealt with, if necessary, by the Courts but the Bank acknowledges that gross negligence or repeated cases of negligence may amount to unprofessional conduct.
The following are, in the opinion of the Bank, the acts and omissions which, if done or made by Licensed Insurance Brokers constitute unprofessional conduct: namely any acts or omissions that breach the fundamental principles governing the professional conduct of Insurance Brokers set out in paragraph 3 below.
The principles mentioned in paragraph 2 above are as follows:
Insurance Brokers shall at all times conduct their business with utmost good faith and integrity;
Insurance Brokers shall do everything possible to satisfy the insurance requirements of their clients and shall place the interests of those clients before all other
considerations. Subject to these requirements and interests, Insurance Brokers shall have proper regard for others;
Statements made by or on behalf of Insurance Brokers when advertising shall not be misleading or extravagant.
The following are some specific examples of the application of these principles:
In the conduct of their business Insurance Brokers shall provide advice objectively and independently.
Insurance Brokers shall only use or permit the use of the description 'Insurance Broker' in connection with a business provided that business is carried on in accordance with the requirements of Proclamation No. 86/1994 Art.2(11).
Insurance Brokers shall ensure that all work carried out in connection with their insurance broking business shall be under the control and day-to-day supervision of
a Managing partner and he shall do everything possible to ensure that employees are made aware of this Code.
Insurance Brokers shall on request from the client explain the differences in and the relative costs of, the principal types of insurance which in the opinion of the Insurance broker might suit a client's needs.
Insurance Brokers shall ensure the use of sufficient number of insurers to satisfy the insurance requirements of their clients. Sufficient number of insurers shall mean more than for 50% of the license insurer.
Insurance Brokers shall, upon request, disclose to any client who is, or is contemplating becoming, the holder of a policy of insurance the amount of commission paid or to be paid by the insurer under any relevant policy of insurance.
Insurance Brokers shall not withhold from the policy holder any written evidence or documentation relating to the contract of insurance without adequate and justifiable reasons being disclosed in writing and without delay to the policy holder. If an Insurance Broker withholds a document from a policy holder by way of a lien for monies due from that policy holder he shall provide the reason in the manner required above.
Insurance Brokers shall inform a client of the name of all insurers with whom a contract of insurance is placed. This information shall be given at the inception of the contract and any charges thereafter shall be advised at the earliest opportunity to the client.
Before any work involving a charge is undertaken or an agreement to carry out business is concluded, Insurance Brokers shall disclose and identify any amount they propose to charge to the client or policy holder which will be in addition to the premium payable to the insurer.
Insurance Brokers shall disclose to a client any payment which they receive as a result of securing on behalf of that client any service additional to the arrangement of a contract of insurance.
Insurance Brokers shall have proper regard for the wishes of a policy holder or client who seeks to terminate any agreement with them to carry out business.
Any information acquired by an Insurance Broker from his client shall not be used or disclosed except in the normal course of
negotiating, maintaining, or renewing a contract of insurance for that client or unless the consent of the client has been obtained or the information is required by a court of competent jurisdiction.
In the completion of the proposal form, claim form, or any other material document, Insurance Brokers shall make it clear that all the answers or statements are the client's own responsibility. The client should always be asked to check the details and told that the inclusion of incorrect information may result in a claim being repudiated.
Advertisements made by or on behalf of Insurance Brokers shall be restricted to contractual benefits only.
When advertising their services directly or indirectly either in person or in writing Insurance Brokers shall disclose their identity, occupation and purpose before seeking information or before giving advice.
Insurance Brokers shall display in any office where they are carrying on business and to which the public have access a notice to the effect that a copy of the Code of Conduct is available upon request and that if a member of the public whishes to make a complaint or requires the assistance of the Bank in resolving a dispute he may wire to:
National Bank of Ethiopia P.O.Box 5550
Fax No. 51-45-88
Telex No. 21020
These Directive shall come into force as of 17th day of November 1995.
November 16, 1995
_Directive No. SIB/12/1996
LICENSING AND SUPERVISION OF INSURANCE BUSINESS
LICENSING OF INSURANCE LOSS ASSESSORS AND LOSS ADJUSTORS
These Directives are issued by the National Bank of Ethiopia pursuant to the authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and Article 25 of the Licensing and Supervision of Insurance Business Proclamation No. 86/1994.
An applicant for a license:
has to be an Ethiopian national;
must not have been convicted of an offence involving dishonesty or fraud, whether in Ethiopia or elsewhere; and
maintain a professional indemnity insurance cover or produce property guarantee for Birr 100,000.= (One hundred thousand Birr).
An applicant should hold a diploma in the field from institutions acceptable by the Bank and sufficient experience in the profession he is applying for.
An applicant should hold a diploma from the Chartered Institute of Loss Adjustors or institutes with similar status who provide professional qualification in loss adjusting.
If the applicant is a partnership it has to be organized in the form of unlimited liability, and the managing partner should meet the requirements provided for under sections 3.1 or 3.2 heretofore.
Loss Assessors or Loss Adjustor Licensed Outside Ethiopia
Loss Assessor or Loss Adjustor licensed outside Ethiopia may engage in loss assessing or adjusting business provided he/she is authorized to do so by the Bank.
A person applying for a license to be Loss Assessor or Loss Adjustor shall pay investigation fee of Birr300.= (Three hundred Birr) and initial license and subsequent annual renewal fee of Birr250.= (Two hundred fifty Birr).
An applicant shall submit:
name and occupation (including date and addresses of previous employment);
four passport size photographs;
curriculum vitae; and
duly completed application form as prescribed by the Bank and enclosures specified therein .
These Directives shall enter into force as of 8th day of April 1996.
April 5, 1996