_ 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.