Kathmandu: The Insurance Board(IB) is all set to issue operating license for new life and non-life insurance including micro-insurance companies. Numbers of groups are on forefront with the preparation of applying for operating license from the IB.
There are already 19 life and 20 non-life insurance companies and 2 re-insurance companies in Nepal. IB is the regulatory authority of the Insurance Industries in Nepal.
In a recent discussion with the Ministry of Finance(MoF), the Insurance Board(IB) has proposed a minimum paid-up capital of Rs. 5 billion for Life insurance companies, Rs. 2.5 billion for Non-life Insurance companies and Rs. 1 billion for micro-insurance companies.
The IB is of the view that new investors will be discouraged to open a new insurance company when calling for a proposal with so the new minimum paid-up capital limit.
It has been learnt the multi-billionaire Binod Chaudhary’s Chaudhary Group has approached for a license to operate life insurance company in Nepal. Currently, the company has non-life insurance company and commercial bank under its BFIs profile.
Due to the practice of issuing licenses to new companies before every general election, the number of insurance companies in Nepal has exceeded the requirement.
The IB has recently submitted a report to the MoF with the conclusion that there is a dire need for a micro-insurance company in Nepal. As soon as the report was made public, various groups are now preparing to open a micro-insurance company. The IB, which is in favor of raising the minimum paid-up capital to Rs. 500 million for micro-insurance, has recently come to the conclusion of increasing the capital of microinsurance along with life and non-life insurance.
At present, the minimum paid-up capital of a life insurance and non-life insurance company is Rs. 2 billion and Rs 1 billion respectively and Rs. 10 billion for re-insurance companies.