Insurance companies in Ethiopia now have a clock running against them. Under Directive No. SIB/63/2026, Requirements for Persons with Significant Influence in an Insurance Company, the National Bank of Ethiopia (NBE) has given insurers six months to secure regulatory approval for everyone who holds significant influence over the company, from board directors to senior executives to shareholders holding as little as 2% of the equity. Miss the window and the penalty is a flat Birr 10,000 per unapproved position, according to reporting by The Reporter Ethiopia. The directive was issued alongside two companion rules, SIB/62/2026 on insurance broker licensing and SIB/64/2026 on external auditor rotation, in what market commentary from StockMarket.et describes as one of the most comprehensive regulatory upgrades to the sector since liberalisation.
Who this is for: Company Secretaries and Legal Counsel at Ethiopian insurance companies who now own the approval-filing process, working alongside the HR and board-governance leads who have to produce the evidence.
What "significant influence" now covers
The directive does not stop at the boardroom door. Persons with significant influence include directors, the chief executive officer and senior executive officers, and any shareholder holding 2% or more of the company's shares, directly or indirectly. That threshold catches people who may never have thought of themselves as a regulated population: a family member with a modest stake, a silent investor, a manager one level below the C-suite. Every one of them now needs individual NBE approval to keep, or take up, that position.
The fit-and-proper bar, and why it is a competency problem
The substance of the directive is a fit-and-proper test, and it is worth reading it as a workforce-capability exercise rather than a legal formality, because that is what it actually asks an insurer to produce. Reporting on the directive's text describes several strands NBE will assess:
- Knowledge, experience and age. Directors and senior executives are expected to meet minimum standards of relevant education and professional experience for the role they hold, alongside a minimum age threshold.
- Financial soundness. NBE will check that a person has not been declared bankrupt, has not had bankruptcy proceedings initiated against them, and has not had assets sequestrated.
- Independence on the board. Insurers must appoint at least three independent directors, meaning no first-degree family ties and no business, professional or commercial relationship with the company.
- Gender diversity. Single-gender boards are no longer permitted; boards must include at least two female directors.
None of that is information a Company Secretary can invent under deadline pressure. It has to already exist, organised, current and defensible, for every person the directive touches. That is precisely the gap that catches organisations out: the underlying facts (a director's degree certificate, a clean bankruptcy search, an accurate family-relationship map for independence checks) usually exist somewhere, scattered across HR files, board packs and old onboarding paperwork, but nobody has ever assembled them into a file that would survive a regulator's question.
Building the evidence file NBE will ask for
Treat the six-month window as a project with a clear deliverable per person, not a single filing.
- List everyone in scope first. Directors, the CEO, senior executive officers, and every shareholder at or above the 2% threshold, including indirect holdings through related entities.
- Pull the education and experience record for each person. Degree certificates, professional qualifications, CVs mapped against the years and seniority the role requires.
- Run the financial-soundness checks. Bankruptcy and asset-sequestration searches, documented and dated, not just asserted.
- Map independence for board candidates. First-degree family relationships, and any business, professional or commercial ties to the company, checked person by person against the independent-director criteria.
- Audit board composition against the gender-diversity rule. If the board is currently single-gender or short of the two-director minimum, that is a governance decision for the board now, not a filing problem for later.
- Assemble a standard submission pack per individual, so the tenth filing is as clean as the first, and build in a review step before anything goes to NBE.
- Track the clock. Six months moves fast when twelve or more individual files are in motion at once; a simple tracker with named owners per person beats a shared spreadsheet nobody updates.
What changes for family-run and closely held insurers
A meaningful share of Ethiopia's insurance sector is family-owned or closely held, where a founder's relatives sit on the board and in senior roles as a matter of course, and where a 2% stake might belong to someone who has never filed anything with a regulator in their life. This directive asks those organisations to do something culturally, not just administratively, different: document relationships that were previously just understood, and accept that a family member's suitability for a board seat is now a question NBE gets to ask and answer, not the family. That is the same shift we described when family-owned companies prepare for an ESX listing and have to formalise information flows that used to run on trust; here it is board composition and personal credentials rather than material information, but the underlying discipline, treating governance facts as something you can evidence on demand, is the same one. It is also the discipline the sector's incumbents will need generally as foreign entrants raise the bar on demonstrable governance.
Turning a one-off filing into a standing capability
The organisations that handle this well will not treat it as a single scramble before the deadline. Board and executive turnover is constant, new shareholders cross the 2% line, and NBE's fit-and-proper expectations are unlikely to be the last word on governance standards for insurers. Building a standing competency framework, a maintained record of who needs to meet which knowledge, experience and independence bar, and how you would evidence it today, turns this directive from a deadline into infrastructure you can reuse every time your board or ownership changes. DaraCorp's Competency Framework course is built for exactly that kind of mapping, and it pairs naturally with Code of Conduct & Ethics for the personal-conduct standards that sit alongside fit-and-proper approval.
This article describes how insurers are preparing to meet Directive No. SIB/63/2026 and is not legal advice or a definitive interpretation of the directive. Confirm your specific filing obligations and deadlines against the primary source at nbe.gov.et and take professional advice on your organisation's particular circumstances.