National Bank of Ethiopia limits external auditor tenure for insurers to six years

This is part of a series of new regulations for the insurance industry. Insurers must appoint external auditors through a competitive bidding process, and a three-year cool-off period is required before an auditor can be rehired. State-owned insurance companies, such as the Ethiopian Insurance Corporation, are exempt from the open bidding requirement, instead contracting with the Office of the Federal Auditor General.

The directive also mandates that audit engagement team members must not have been employed by the insurance company within the past three years. External auditors are required to submit an "Independence Confirmation" and a "Fit and Proper Declaration," with independence defined as freedom from conditions that threaten unbiased responsibility. The "fit and proper" requirement assesses financial integrity, as well as legal and criminal standing.

Insurers need NBE approval for auditor appointments or reappointments within 20 working days, and for any revisions to engagement terms within 10 working days. Removing or replacing an auditor requires prior notification to regulators. Auditors must disclose findings directly to shareholders and to the NBE within three months of the financial year-end, with reports published on the insurer's website within two weeks of ap