The central bank, National Bank of Ethiopia (NBE), has released two directives, one on the licensing and supervision of microinsurance agents and the other on the licensing of insurance broker.
Licensing and Supervision of Microinsurance Agents (Directive No SIMB/4/2026)
One of the greatest challenges for microinsurance in Ethiopia is delivering products—that are in demand, with good quality service—efficiently and effectively to clients.
Rising to the challenge, NBE is addressing the country’s inadequate distribution networks with commercial incentives. As a part of this, it has introduced a new regulation for licensing, regulating and supervising persons acting as distribution channels for microinsurance business.
Among other provisions, the directive sets out requirements for the licensing of microinsurance agents, such as applying to the central bank for a licence. The applicants must satisfy requirements stipulated in the directive. These include:
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A corporate agent must be fully owned by Ethiopian nationals or foreign nationals of Ethiopian origin.
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Individual agents must meet the microinsurance training requirements in the relevant microinsurance product categories and be an Ethiopian national or a foreign national of Ethiopian origin. They must also have completed at least the level of 12th grade of general secondary school education or equivalent.
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Microinsurance agents may only provide intermediary services for the categories of microinsurance products stipulated in their licences.
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Individual agents must maintain professional indemnity cover of at least ETB10,000 ($63.67) for each licence category for microinsurance products they are authorised to act on.
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Agents must apply for modifications of a licence if they enter into agency agreements with more than one microinsurer.
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A microinsurance agent may only act on behalf of a single provider in respect of each distinct licence category.
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If an agent is not acting as exclusively on behalf of a microinsurance provider, the information must be disclosed to each provider.
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Agents must submit the licence renewal application within one calendar month after the expiry date of the licence.
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Microinsurance agents may be subject to suspension or cancellation in the cases of misrepresentation or misconduct.
Licensing of Insurance Broker (Directive No SIB/62/2026)
The broker licensing directive is issued to ensure insurance brokers play a professional role in assisting clients in the procurement and administration of insurance, the NBE says.
To be licensed as an insurance broker, the applicant must meet a set of conditions, including:
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Be an Ethiopian national or a limited liability partnership fully constituted by Ethiopian nationals.
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The CEO of an insurance broker (general or life insurance or both), must hold at least an advanced diploma in insurance.
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Must maintain a professional indemnity insurance policy.
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Must represent the client in the course of negotiating insurance cover and serve the client with reasonable professional skill in the course of dispensing advice on the insurance needs of the client.
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Must discharge duties and responsibilities as a diligent business person with good faith and integrity.
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Must offer a particular risk to at least three insurance companies and carry out a thorough analysis of each insurance company’s proposal with particular emphasis on price, scope of cover and the reputation of the insurance company.
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Must clearly explain the differences and relative costs of the principal types of insurance to the client and provide advice on the types of insurance cover that best suit the client’s needs.
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May place a particular risk with an insurance company of the insured’s choice, where the prospective insured has already decided upon the insurance company with whom the particular risk is going to be placed, by securing a written statement from the prospective insured.
The regulator may revoke a broker’s licence if he/she/it has conducted its business in a manner contrary to good faith, integrity and detrimental to the interests of its clients.
The regulator may also automatically cancel the licence of any insurance broker who fails to maintain a valid professional indemnity insurance policy at all times.
Both directives came into force on 26 March 2026.