Kathmandu. While insuring is doing facultative reinsurance, the provision of offering to domestic reinsurers in the first place has been removed.
The Nepal Insurance Authority (NEA) has made the third amendment to the Insurance Reinsurance Directive, 2080 BS and removed the provision of sub-sections (6) and (7) of Section (4). Earlier, sub-section (6) of Section (4) of the Directive had the provision that the insurer should first propose to the domestic reinsurer while insuring the facultative reinsurance. There was also a provision that the domestic reinsurer would have to send a response within 24 hours on whether to accept or reject the proposal.
Similarly, the provision in sub-section (7) of (4) that the insurer can do other things if the reinsurer rejects the proposal through the amended directive has also been removed.
The NRA has also amended the provision of reinsurance with the reinsurer in Section 8 of the directive. Now, subject to sub-section (1) of Section (7) of the Directive, the insurer will have to provide direct share (direct session) under the treaty reinsurance to the domestic reinsurer.
Sub-section (1) of Section (7)
As per the directive, at least 30 percent of the remaining share should be provided to the domestic reinsurer.
Similarly, the insurance company will have to renew life insurance, motor, agriculture, livestock and herbal insurance, riot and terrorism insurance and miscellaneous insurance (except travel, trekking and health insurance) within the country subject to Section 18. The revised directive states that the domestic reinsurer cannot reject the reinsurance so obtained.
Through the amendment, this directive will now be called the Reinsurance (Third Amendment) Directive, 2083.
