Directive No.
SIB/1/1994
LICENSING AND SUPERVISION OF INSURANCE BUSINESS
Issuing Authority
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 42 of the Licensing and Supervision of Insurance business
Proclamation No. 86/1994.
Definitions
In these Directives, unless the context provides otherwise:
"Related parties" shall mean directors, founders, principal officers, employees and
other businesses in which they have direct interest.
"Residence" shall have the meaning assigned to it under Article 174 of the
Commercial Code of Ethiopia.
"Proclamation" shall mean proclamation to provide for the Licensing and Supervision
of Insurance Business No. 86/1994.
Information Required From Applicants For License
Along with those provided for under the Proclamation, the following Information shall
be contained in any application for a license to be an insurer.
Evidence for paid up capital which includes certificate of deposit in a blocked
subscription account and evidence for valuation of contribution in kind.
Names and occupation (including dates and addresses of previous employment), of
the organizers of the company if these are other than the directors.
Feasibility study document.
Projection of Financial statements for the first three years of operation showing
major categories of liabilities.
Disclosure of the identity of shareholders who have acquired more than ten percent
of the capital stock indicating their names, nationality number and value of shares
held.
Separate cost of vault, equipment, furniture and fixture purchased or leased.
Authenticated ownership certificate and/or lease agreement for items listed under
Section 10.1 of the application form.
Description of any purchase or proposed purchase of goods and services, or lease of
real estate by the insurer from related parties.
Proposal of insurance coverage and extent of such coverage.
Curriculum vitae of the proposed Chief Executive, founders and/or directors including
their age, marital status, education, employment history for the past ten years, their
experience in business and financial affairs, their involvement in civic social and
charitable activities including any leadership position held.
Duly completed application form as prescribed by the Bank and submit enclosures
specified therein.
Proposed organizational chart of the insurer, and brief description of the functions of
the main organizational units.
Criteria For Selection Of Chief Executive
Education
A minimum of first degree or equivalent in relevant field acquired from a university
or higher institution of learning.
Experience
A minimum of ten years of reputable managerial experience in insurance or related
business.
Age
A minimum of thirty five years.
Marital Status
Preferably married or responsible to a family.
Criteria for Selection of Members of Board of Directors
Education
A minimum completion of high school education with ability to read and grasp
contents of reports, especially financial statements.
Experience
Member of Board of directors shall have adequate managerial experience in
business, and/or similar organizations.
Age
A minimum of 30 years of age
Fees
A company applying to undertake Insurance Business shall pay investigation fee of
Birr1,750.- (Birr one thousand seven hundred fifty only), that is to be paid at the
time of lodging an application.
A company licensed to undertake insurance business shall pay initial registration fee
currently prescribed by the Ministry of trade for registration of Memorandum and
Articles of Association.
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A company licensed to undertake general or long term Insurance Business shall pay
initial license and subsequent annual renewal fee of Birr 2,000.-(Birr two thousand
only).
A company licensed to undertake both general and long term Insurance Business
shall pay initial license and subsequent annual renewal fee of Birr 3,000.- (Birr three
thousand only).
These Directives shall enter into force as of Fifteenth day of June 1994.94
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N A T IO N A L B A N K O F E T H IO P IA
A D D IS A B A B A
T E L A G R A P H IC A D D R E S S PLEASE ADDRESS ANY REPLY TO
N A T I O N B A N K P . O . B ox 5550
T E L E X 21020 A p p lication Form to U n d ertak e
In su ran ce B u sin ess A D D IS A B A B A
CO DES USED
P E T E R S O N 3 rd & 4 th E D .
Photo of
Representative
of Applicant
Name of applicant and Designation__________________________________
___________________________________________.
Proposed Name of the company (under formation) ______________________
___________________________________________.
Name of the Spokesperson_________________________________________
Address: ________________________________________
_________________________________________
_________________________________________
Address of company, and proposed branches
Head office Address:
Location_________________________________________________
P.O.Box _________________________
Tel. _____________________________
Telex ___________________________
Fax _____________________________
Branch Address: (if any)
Location _______________________________________________
Tel. ________________________
P.O.Box _____________________
Location _____________________________________
Tel. _________________________
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P.O.Box _____________________
(If there are more than two proposed branches, annex a list in same form).
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Names and Addresses of the Founders
5.1 Name Nationality Occupation Residence Address Number of
Shares Held
5.1.1
5.1.2
5.1.3
5.1.4
5.1.5
5.1.6
5.1.7
5.1.8
5.1.9
5.1.10
* (Where the founders are more than ten, annex a list in same form)
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Names and Addresses of Members of Board of Directors
6.1 Name Occupation Residence Nationality Address Number of
Shares Held
6.1.1
6.1.2
6.1.3
6.1.4
6.1.5
6.1.6
6.1.7
6.1.8
5.1.9
6.1.10
6.1.11
6.1.12
(Attach curriculum vitae of each director)
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Contributions:
In cash Birr _________________________________________________
In kind (specify the type of property and value)
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
________________________________
Initial capital of the Company (in Birr)
Authorized capital_____________________________________
Subscribed capital _____________________________________
Paid up capital ________________________________________
Shares
Number of shares issued _____________________________________
Number of shares held by founders ____________________
Number of shares held by subscribers__________________
9.2 Par value of each share in Birr ________________________________
Provide the following information with respect to:
Cost of premises' equipment and others where purchased or leased by the applicant.
Item Manner of Acquisition Cost
Building
Land
Vault
Equipment
Fixture
Professional Services
Total
10.2 Indicate if any of these items are leased or to be leased or purchased or to be
purchased from related parties.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
________________________________
* Lease, purchase, rent .......etc.
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10.3 Lease agreement
Description of Premises Leased or to be Terms of Expiry Date
Leased Lease
Types and extent of the company's proposed insurance coverage
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
________________________________
12. Name and Address of Insurer's actuary; if any
___________________________________________________________________
_____________________________________________________
13, Name and addresses of reinsures
___________________________________________________________________
_____________________________________________________
Identify the main class or classes of Insurance to be undertaken
Long term General
{ } { }
If general insurance business is to be undertaken, identify the class or classes.
15.1 Accident and Health _______________
15.2 Motor Vehicles ________________
15.3 Aircraft damage and liability ________________
15.4 Ship damage and liability ________________
15.5 Goods in transit _________________
15.6 Property damage _________________
15.7 Pecuniary loss ________________
15.8 General liability ________________
Others (Specify) _____________________
_____________________
Give statements that Board of Directors and the Chief Executive are vetted to fulfill
requirements stated under Article 33 of Proclamation 86/1994.
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___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_______________________________________________________________
Any other statement
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_____________________________________________________________
Under pain of penalty provided under Article 41 of the Proclamation, I hereby
declare that the above particulars and the information provided in the enclosure
attached are true and correct and undertake to notify the Bank of any material
alteration in the information and particulars in accordance with Article 35 of the
Proclamation.
Date________________________ Signature ____________________
Name and Official Designation of the Applicant
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The following particulars are attached here to:
ENCLOSURES
Four authenticated copies of the Memorandum and Articles of Association by which
the Company is constituted.
Four copies of bank certificates of deposit for contributions in cash held in
subscription blocked account.
Four copies of valuation evidence for capital contribution in kind.
Two copies of feasibility study documents.
Two copies of projected Financial statements for the first three years of operation.
Two copies of authenticated ownership certificate for items listed under Section 10.1
of the application form.
Two copies of evidence of insurance coverage for premises already acquired or
leased.
Four copies of curriculum vitae of Chief Executive officer, founders and/or members
of Board of Directors.
One copy of evidence of payment of investigation fee.
Two copies of organizational chart of the proposed insurance company and
description of functions of main organizational units.
Four passport size photographs of the official designate who applies for the license
on behalf of the Company.
Two copies of disclosure of the identity of share holders who have acquired more
than ten percent of the Capital stock, indicating their names, nationality, number and
value of shares held.
Two copies of each form of insurance policy together with endorsements and
proposal forms which the company proposes to issue.
Four copies of schedules of latest premium rates and commissions payable for all
classes of business transacted.
Four copies of list of all agents and brokers to whom commission is payable.
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