Kathmandu: The licensing regime in the insurance industry has resulted in the emergence of micro-insurance companies in the domestic insurance market. Among seven proposed micro insurers, two are already in operation.
Nepal Micro Insurance Company Limited (NMIC) started its operation on Thursday. The executive director of Nepal Insurance Authority, Raju Raman Paudel, inaugurated the central office of the insurer at Bharatpur Chitwan.NMIC has obtained an operating license for the general insurance business. Earlier, Guardian Micro Life Insurance announced its commercial operation last week.
There are additional five microinsurance companies in the pipeline, out of them two microinsurers have already obtained operating licenses from the regulatory authority.
The NIA paved the way for issuing operating licenses to micro-insurance companies following the merger of life insurance and non-life insurance companies. NIA forced insurers to opt for a merger to double their paid-up capital within a short period.
It has been witnessed that ruling political parties use a licensing regime with the motive to accumulate funds for their election campaign. The earlier coalition government had made decisions to distribute licenses for new microinsurance companies, reinsurance companies, and stock brokers.
