Ethiopia has drafted a new Insurance Proclamation to open its insurance sector to foreign investment for the first time. The move aligns with recent liberalizations in banking and telecommunications.
Ethiopia's government has prepared a draft Insurance Proclamation to allow foreign insurers into the market, ending decades of exclusive domestic control. Foreign firms will operate via local subsidiaries, and engagement with international reinsurers will boost capacity and risk distribution.
The proclamation establishes the Ethiopian Insurance Regulatory Authority (EIRA) as an independent body, transferring oversight from the National Bank of Ethiopia (NBE). EIRA will handle licensing, governance monitoring, and inspections.
A regulatory sandbox will enable testing of innovative products, including FinTech services. Banks and microfinance institutions can sell insurance through bancassurance, with micro-insurance and index-based products for agriculture.
Safety measures include mandatory external actuaries, a resolution authority for insolvency cases, and an Insurance Policyholders Protection Fund set by the Council of Ministers.