Kathmandu, May 7

A total of 12 companies have submitted their applications to obtain licence to open life insurance firms and four have submitted applications to open non-life insurance firms. The Insurance Board — insurance sector regulator — had asked those who had submitted their applications in fiscal 2007-08 to resubmit their applications to set up insurance companies as per new paid-up capital requirement.

Back then the Insurance Board had taken no decision regarding awarding licences for new insurance firms.

After increasing the paid-up capital requirement through the recently issued ‘Directives on Insurer Registration and Insurance Business Operation’ to Rs two billion and Rs one billion for life and non-life insurance companies, respectively, the insurance sector regulator had given those companies who had submitted applications in fiscal 2007-08 three weeks time to resubmit applications with new capital requirement. Previously, the paid-up capital requirement for life insurance companies was Rs 500 million and for non-life firms it was Rs 250 million.

The insurance companies that are in operation have to meet the paid-up capital requirement by the end of this fiscal. However, new companies have to submit applications with the required paid-up capital to obtain licence.

Chiranjibi Chapagain, chairman of Insurance Board (IB), said that the Board will forward the submitted applications of life insurance companies to the Ministry of Finance for approval. “We require the finance ministry’s consent to issue licence to life insurance firms,” he said. However, the Insurance Board itself can issue licence to non-life insurance companies.

The Insurance Board has said that it is going to review only those applications that were submitted to the Board in 2007-08. “The Insurance Board will decide on whether or not to open applications for new applicants only after conducting a market study that includes insurance penetration, trend of insurance business in the country and room for new firms,” as per Chapagain.

The entities that have resubmitted their applications to open life insurance firms are Citizen Life Insurance, Star Life Insurance, Sun Nepal Life Insurance, Sanima Life Insurance, Reliance Life Insurance, Reliable Life Insurance, Mahalaxmi Insurance, Jyoti Insurance, Union Life, Unilife Insurance, Standard Life Insurance and IME Life Insurance, according to the Insurance Board.

Likewise, General Insurance, Sanima Insurance, Ajod Insurance and Manakamana Insurance have applied for licence to open non-life insurance firms.

Applicants of life insurance firms will get licence only after finance ministry’s consent, but the Board will issue licence to non-life insurance firms if they meet required criteria, as per Insurance Board officials.