Kathmandu: The Insurance Board has received proposal from seven companies for the license to run micro insurance company. According to the Board, 3 days prior to the deadline of application submission for new license, seven companies have applied till date so far.
The Insurance Board had published a 35 days’ public notice on 10 Bhadra 2079 calling applications from interested entity to apply for the establishment of four micro non-life and three micro life insurance companies. The Board has fixed minimum paid up capital for Rs. 75 crore for the new company.
According to the Board, Neo Lite Micro General Insurance, Swadeshi Micro Life Insurance Company, Janaki Jeevan Micro Insurance Company, Nepal Micro Insurance Company, Gourdain Micro Life Insurance, Karnali Micro Insurance and Everest Micro Insurance Limited have applied for the license.
Out of the minimum paid-up capital requirement, the promoters must make an investment of 70 percent and rest fund can be generated after initial public offering(IPO).
The Board claims that distribution of license for micro insurance companies will help spread insurance penetration among marginalized communities and the farmers. But experts opine that without policy level support and structural reshuffling not much can be expected from the new companies as well.
It has been a poor trend to distribute new license prior to every election of house of representative to help the ruling party raise fund for election expenses. Sources confirm that it has already been informed to the new investors to allocate additional Rs. 20 against their per Rs. 100 investment as promoter’s share. The additional fund generated for bribe are mostly distributed to the higher authority of the Insurance Board, the ministry of Finance, including the finance minister and the ruling party as well.
Earlier, in the year 2074, the promoters of 10 new life insurance companies had paid Rs. 5 to 10 per share as bribe money. One of the former promoter shares in anonymity, ”Such bribe money were paid in hard cash. It was so rush to accumulate cash from different bank account in few hours.