KATHMANDU, FEBRUARY 22
The Insurance Board (IB) has directed the insurance companies to make mandatory investments in the infrastructure and agricultural sectors of the country.
According to the board, it has sent letters to the insurance companies to compulsorily invest in agriculture, water resources, tourism and infrastructure sectors.
As the insurance companies seem to be focusing on commercial banks to earn interest on time or investing only in the stock market, the IB has directed insurance companies to make investment in agriculture, tourism and infrastructure development too.
According to the board, insurance companies have to invest in eight different sectors as per the provision in 'Insurers' Investment Directive 2019'. As the investment of insurance companies is being made in the non-productive sector, a circular was issued on Sunday requiring them to invest in the infrastructure sector with the objective of helping to boost the country's economy in the coming days.
According to the investment guidelines, insurance companies should invest 20 per cent of the amount deposited in the insurance fund in agriculture, water resources, tourism and infrastructure.
There are 19 life insurance companies and 20 non-life insurance companies operating in Nepal. But so far only a handful of them have invested in agriculture, water resources, tourism and infrastructure. Therefore, as per the directive, the committee has issued a circular to expand the amount of insurance fund in the areas specified without investing only in term deposits and share market.
A version of this article appears in the print on February 23, 2021, of The Himalayan Times.