Nine life insurance firms get licence
Kathmandu, August 24
Nine life insurance firms have obtained the operating licence from Insurance Board (IB) — the insurance sector regulator — in last three months since IB resumed granting licence to the companies whose applications were pending since long.
IME Life Insurance, Union Life, Jyoti Insurance, Sun Nepal Life Insurance, Reliance Life Insurance, Reliable Life Insurance, Citizen Life Insurance, Sanima Life Insurance and Star Life Insurance have obtained the licence, according to the Insurance Board.
This means nine new players have entered the life insurance market, taking the total number of life insurance companies in the country to 18.
After increasing paid-up capital requirement through recently issued ‘Directives on Insurer Registration and Insurance Business Operation’ to Rs two billion and Rs one billion for life and non-life insurance firms, respectively, IB had given three weeks’ time to the firms that had submitted their applications in fiscal 2007-08 to resubmit their applications as per new capital requirement.
Previously, paid-up capital requirement for life insurance firms was Rs 500 million and for non-life firms it was Rs 250 million.
According to the rules, the insurance sector regulator has to first get a go-ahead from Ministry of Finance (MoF) to grant operating licence to life insurance companies. IB had forwarded 12 applications of life insurance companies in third week of May to MoF and the ministry had deemed 10 to be eligible to obtain licence. IB had set the deadline of three months to grant the licence, which expired on Wednesday.
Of the 10 applicants approved by MoF, Mahalaxmi Life Insurance failed to meet the paid-up capital requirement. Mahalaxmi had submitted another application at the MoF seeking an extension of 45 days to meet the requirement. However, the proposal has been turned down as the Insurance Board has closed the licensing process for life insurance companies, according to IB Chairman Chiranjibi Chapagain.
Insurance companies have to meet the paid-up capital requirement set by the insurance sector regulator to obtain licence.
IB is also preparing to grant licence to non-life insurance firms by next month. IB has received four applications for operating licence of non-life insurance firms — General Insurance, Sanima Insurance, Ajod Insurance and Manakamana Insurance. There are currently 17 non-life insurance companies in operation in Nepal.