Kathmandu: The Insurance Board has received application from 31 companies for the license of 7 micro insurance company. According to the Board, 24 proposals have been received on the last date of the application submission. The Board had given Thurday’s deadline for the application submission.
The Insurance Board had published notice on 10th Bhadra 2079 calling interested companies to submit proposal for 4 non-life insurance and 3 life insurance companies for micro-insurance business. According to the insurance committee, 31 proposals have been received by the last time. As of last Tuesday, only 7 applications were received, 24 have submitted proposals within last two days.
The Board has officially announced that the new license is being distributed with the aim of expansion of access to insurance of marginalized group through specialized micro insurance product and business. The industry experts comment that its quite contrary to the Board’s strategy of minimizing the numbers of insurance companies through forceful merger.
The Board has given deadline of Chaitra 2079 to maintain the minimum paid-up capital. The new paid-up capital for life insurer is Rs. 5 billion while for non-life insurers Rs.2.5 is the minimum paid-up capital. The size of the new paid-up capital is almost double than existing capital of most of the insurers. So, it’s hard for them to arrange the additional capital either through stock dividend or additional investment from their promoters. Following the strict instruction from the regulatory body, most of the insurers have chosen the option for merger to meet the minimum paid-up capital requirement.