Kathmandu: Those willing to open a new insurance company are shocked to know that around eighty million rupees bribe money to be paid for the license of the new micro insurance company proposed by the Insurance Board. As the Board mulls to distribute license for seven new micro insurers within a a short period of time, the meeting of prospective investors continues day by day.
Industry Sources say, ”On the one hand, they have to raise capital for investment, on the other hand, they have to make arrangement not only for bribes, but also political access to acquire the license.”
An additional Rs. 15 per share must be paid, a businessman who was willing to invest in non-life insurance company but later skipped due to the offer of bribe said, “There is still no return against the money invested for life insurance company five years ago, its tough to arrange funds in the present crisis.”
The regulatory authority, Board, has published a public notice for the issuance of licenses to seven micro insurance companies. The minimum paid-up capital has been fixed at Rs. 750 million. Out of Rs. 75 million, the promoter should invest 70 percent i.e. Rs. 525 million rupees immediately. They are saying that those who want to be promoter should agree to pay additional Rs.15 to get ownership of shares worth Rs. 100. In other words, only Rs. 100 will be counted as their investment in the company’s book.
There is a liquidity crunch in the financial market amid lack of investable funds with BFIs, potential promoters say, raising funds for capital is not as easy as before.
The Board had published a 35-day public notice on the 10th Bhadra to calling application for the distribution of micro insurance license. It has already received applications from seven different companies.
During the distribution of license to 13 new insurance companies in the year 2074, the promoter shareholders had to pay a bribe of Rs. 5 to 7. At that time, Rs. 5 had to be paid to the regulatory body, another investor said, the remaining Rs. 2 were collected by the leader who coordinated the work from company registration to obtaining the license.
The ruling political party has been seeing a tendency to distribute new insurance company licenses during every parliamentary election to meet election expenses. In the year 2074, 10 life insurance companies and 3 non-life insurance companies were allotted licenses to meet expenses for parliamentary elections.