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The National Bank of Ethiopia has issued a public notice to gather public opinion on the draft Motor Insurance Own Damage Minimum Premium Rate Directive (Draft Directive) which is expected to become effective within a few months. The Draft Directive sets the minimum rate for the amount of insurance premium that companies charge customers with the objective of aligning the insurance premium proposed for the insurance with the risk to be insured. The Directive also envisages culminating unwarranted premiums, undercutting, and protecting the interest of policyholders.
Accordingly, the Draft Directive has set minimum motor insurance premium rates as follows:
The Draft Directive clearly provides that the proposed minimum premium rates described in the table will be applied on new businesses and renewals.
Should you have any questions on this legal alert, please do not hesitate to contact Mesfin Tafesse.