State Regulation and Supervision of Insurance Industry in Ethiopia: The Need for a Separate Regulatory and Supervisory Body
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Date
2020-05
Authors
Biniyam Yitbarek
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Insurance is about more than just compensating for loss as it is a highly effective mechanism for
assessing, managing and reducing risk. By helping customers face up to and manage risk
effectively, insurance is an invaluable part of modern society. Regulation and supervision of the
financial sectors generally and the insurance sector specifically is crucial in the economic
development of developing countries like Ethiopia. The insurance industry is one of the most
instrumental means to assist Ethiopia to achieve its macroeconomic stability and growth
objectives. The insurance sector today is however marred by a lot of regulatory inefficiencies as
well as emerging trends and this research is motivated to pay a fabulous endeavor on this part.
The main theme of this study is on the existing Ethiopian insurance sector regulation and
supervision legal framework and problems associated with the insurance sector regulation. The
study investigate the challenges and emerging trends in the sector, which have necessitated calls
for reform in the regulatory and supervisory framework. Further, it examines internationally
accepted models or types of financial sector regulation and compares the success achieved by
separate insurance regulatory agencies in other jurisdictions.
Also, the research argues that there is a need for insurance companies to be regulated and
supervised by separate insurance regulatory authority or commission responsible to the Ministry
of Finance and Economic Cooperation.
Overall, this thesis asserts that in order to enhance Insurance penetration and growth of the
industry, there is need for concerted effort by both the insurance regulatory and supervisory
body and the individual Insurance companies in implementing strategies that will ensure that the
various challenges identified as hindering the growth of the industry dealt with.