Kathmandu: Surya Life Insurance Company and Jyoti Life Insurance Company are expected to sign a memorandum of understanding for merger. It has been learnt that the two companies are all set to sign the MOU today.
Keshav Prasad Bhattarai, Chairman of Surya Life Insurance Company and, Nanda Kishore Sharma, Chairman of Jyoti Life Insurance, will sign the agreement. The swap ratio will be determined on the basis of the due diligence audit(DDA) report, a senior official said.
Surya Life and Jyoti Life Insurance have come to close a deal for merger amid the constant pressure from the Insurance Board to opt for merger to meet the minimum paid-up capital.
At present, Surya Life has a paid up capital of Rs 2.42 billion while Jyoti Life has paid up capital of Rs 2.20 billion. If there is a merger with 1:1 swap ratio, the total paid-up capital will reach Rs 4.62 billion.
The Board has instructed to increase the paid-up capital of insurance companies on March 24. The Board has earmarked paid-up capital Rs 5 billion for life insurance companies and Rs 2.5 billion for non-life insurance companies.
Earlier, an agreement for a merger had been signed between Union Life, Prime Life and Guransh Life Insurance. Despite the merger agreement, the further process has not taken place yet.