The National Bank of Ethiopia has issued a new directive requiring all insurance brokers to operate as either sole proprietors or limited liability partnerships fully owned by Ethiopian nationals.
The directive, which took effect on March 26, 2026, introduces a structural shift in how insurance brokerage businesses are established and owned. Existing firms are given five years to reorganize in line with the new requirement.
The rule effectively limits brokerage activity to locally owned entities, setting clear boundaries on ownership and legal form within the sector.
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Beyond ownership, The directive also sets detailed qualification requirements for management. Chief executive officers must hold either an advanced diploma from the CII UK or an equivalent institution, along with at least three years of managerial experience in the insurance sector, or a first degree in a business-related field with a minimum of five years of managerial experience overseeing underwriting or claims operations.
Partners in limited liability partnerships are required to have at least a first degree and 10 years of experience in the insurance industry, including four years in a managerial role.
Insurance brokers are required to maintain professional indemnity insurance, with coverage set at a minimum of one million birr or three times their annual commission income.
The directive also outlines conduct rules, including a requirement for brokers to assess offers from at least three insurers before placing a client’s risk, unless the client specifies otherwise. Brokers must also provide clear information on policy terms, costs and risks.
Additional provisions include annual license renewal requirements, detailed record-keeping obligations and restrictions on ownership links, barring close relatives of brokers from holding equity in related insurance service firms. The directive replaces earlier rules issued in 1995 and 2010.
