Kathmandu: Out of the 39 insurers, only four insurance companies could succeed to meet the minimum paid-up capital requirement within the deadline. The Nepal Insurance Authority had given a deadline of 13th April 2023( Chaitra end of 2079) to almost double-fold their paid-up capital.
A circular issued by the Authority on 10 Chaitra 2078, had the provision of minimum paid-up capital of NPR 5 billion and NPR 2.5 billion for life insurance companies and non-life insurance companies respectively. Earlier, the minimum paid-up capital for life insurance and non-life insurance companies was NPR 2.5 billion and NPR 1.25 billion only.
Among life insurance companies only Nepal Life Insurance succeeded to meet the minimum paid-up capital since it already had a paid-up capital of NPR 8.2 billion.
Among non-life insurance companies, Shikhar Insurance, Siddhartha Premier Insurance, and Sagarmatha Lumbini Insurance reached the minimum paid-up capital. Shikhar Insurance has NPR 2.65 billion, Siddhartha Premier has NPR 2.80 billion, and Sagarmatha Lumbini Insurance has NPR 2.62 billion paid-up capital. Among these three, Siddhartha Premier and Sagarmatha Lumbini could increase the paid-up capital only after the merger.
After the merger among life insurance companies, the number of life insurers shrunk to 17 and non-life insurers shrunk to 16. Now, the total count become 33 only.
According to the officials from the Authority, the companies which have already concluded but are unable to meet the minimum paid-up capital will be given additional one-year grace for capital increment. And companies that have submitted the capital plan too will be provided a grace period to meet their capital plan.
Among life insurers Surya Jyoti Life Insurance and Sanima Reliance Life Insurance, which successfully concluded the merger process still have a capital shortage. Surya Jyoti Life has NPR 4.54 billion and Reliance Life has NPR 4.18 billion paid-up capital.
The merger process of Prabhu Life Insurance and Mahalakshmi Life Insurance, Union Life Insurance, Prime Life Insurance, and Gurans Life Insurance has not been concluded yet. Keeping the merger process aside, Mahalakshmi Life Insurance has proceeded to issue IPOs at a premium prior to the merger. The paid-up capital of the proposed life insurer Himalayan Life Insurance, which will be formed after the merger of Union Life, Prime Life, and Gurans Life, will reach NPR 7.72 billion.