Kathmandu: The outgoing government is mulling issuing licenses for another seven new insurance companies amid criticism over the growing number of insurance companies. Sources from the Nepal Insurance Authority confirm that the ministry of finance has given instructions to make the necessary preparation to issue another seven licenses for new micro insurance companies.
Immediately after the general election, the Authority had already shortlisted seven companies for license distribution. The process of issuing licenses is underway. Again, the Authority is in preparation to issue licenses for additional seven micro insurance companies including four life insurance companies.
The coalition government has taken it as an opportunity to raise funds for the last general election through the new license distribution of insurance companies, stock brokers, and stock exchanges.
An official from the Authority has shared that the new license too will be distributed on the provincial level similar to the previous announcement. This time a either general or life insurer’s license will be issued for a province where a license for either one of the insurance companies has already been issued.
To pave way for the distribution of new licenses the Authority has already forced both life and general insurers to opt for the merger to meet the deadline for minimum paid-up capital requirement. The existing life and general insurers have only four months left to almost double their paid-up capital without opting for the right-share issues to the public. The policy of merger and distribution of new licenses seems quite contradictory.