LICENSING AND SUPERVISION OF INSURANCE BUSINESS Statutory Deposit Directive No. SIB/50/2020

LICENSING AND SUPERVISION OF INSURANCE BUSINESS Statutory Deposit Directive No. SIB/50/2020

Whereas, protecting policyholders interest is among the main regulatory and supervisory concerns and responsibilities of the National Bank of Ethiopia;

Whereas, establishing a fund necessary for the purposes stated and maintaining it with the National Bank of Ethiopia is necessary;

Now, therefore, the National Bank of Ethiopia has issued this directive pursuant to the authority vested in it by Article 20 of Insurance Business Proclamation No. 746/2012 and Article 64(2) of the Insurance Business Proclamation No. 746/2012 as amended by the Insurance Business (Amendment) Proclamation No.1163/2019.

1. Short Title

This directive may be cited as “Statutory Deposit Directive No. SIB/50/2020”.

2. Definitions

For the purpose of this directive, unless the context provides otherwise:

2.1 “main class of insurance business” means either general insurance business or . long term insurance business as the case may be;

2.2 “National Bank” means the National Bank of Ethiopia; and

2.3 “statutory deposit” means deposit to be maintained, in cash or government securities by an insurance company with the National Bank.

3. Scope of Application

This directive shall apply to all insurance and reinsurance companies.

4. Requirement

An insurer or a reinsurer shall, in respect of each main class of insurance business it carries on, deposit and keep deposited with the National Bank an amount equal to 1S°/o of its paid-up capital in cash or government securities.

5. Effective Date

This directive shall enter into force as of the 4’h day of August 2020.