The National Bank of Ethiopia (NBE) has issued a new directive allowing the establishment of local reinsurance companies, according to The Reporter.

The announcement was made on last week at the headquarters of the NBE located off Sudan Street.

The 'Reinsurance Company Establishment Directive', signed by Governor Teklewold Atnafu, allows for the establishment of wholly Ethiopian owned reinsurance share companies, according to the directive read.

The directive also states that the minimum paid-up capital to license a reinsurance company is 500 million birr fully paid in cash.

“The establishment of re-insurers will save a considerable amount of foreign currency that Ethiopian insurance companies used to pay for foreign reinsurance,” Temesgen Zeleke, insurance supervision director with NBE said on a press conference last week.

Ethiopian insurance companies spend up to 30 percent of the annual premium collected, to procure the services of foreign reinsurance companies, according to The Reporter.

Source: The Reporter