Kathmandu: The Nepal Insurance Authority(NIA) has issued license to 7 micro insurance companies including 3 life insurer. The notice published on Sunday by the Authority states that new license for 3 life and 4 general insurance companies has been issued.
The regulatory authority has issued license to Guardian Micro Life Insurance(Biratnagar, Province 1) , Crest Micro Life Insurance(Karnali Micro, Birendranagar) , Liberty Micro Life Insurance (Gandaki Province) for life insurance business. Similarly, for general insurer’s business new license has been issued to Trust Micro Insurance( Lumbini Province,Butwal) , Nepal Micro Insurance(Bagmati Province,Bharatpur), Star Micro Insurance(Madhes Province, Janakpur) and Protective Micro Insurance ( Sudur Paschim Province, Dhangai).
Though the licenses have been distributed on province basis, the insurer are free to sale their insurance product at any corner of the country. The NIA may set a minimum target for the insurers to serve a minimum population or collect minimum premium from their distinct province.
All the new licenses have been distributed for micro insurance company with a paid-up capital of Rs.75 crore. The modality of the micro insurance company, their principle for operation, limit for sum assured and many other aspects have not been decided yet.
The Insurance Authority had invited applications on 10 Bhadra, 2079 from interested group or companies to grant license for micro insurance business. So far 31 companies had applied.
With the added number, the Authority is hopeful to increase the penetration of Insurance. Experts opine that the Authority has been criticized for its poor regulation and control over the insurance companies. With the existing limited number of workforce, poor knowledge about the insurance industry and traditional organizational structure would remain challenging factors for the regulatory authority for effective monitoring and controlling.
Currently, there are 2 reinsurance, 18 general insurance and 19 life insurance companies in operation.
