Kathmandu, August 2
Three more life insurance firms have obtained operating licence from the Insurance Board — the insurance sector regulator — today.
Sun Nepal Life Insurance, Reliance Life Insurance and Reliable Life Insurance have obtained the licence, according to Insurance Board.
Altogether six new life insurance companies have obtained the operating licence since the IB resumed granting licence to the companies whose applications were pending there since long.
Earlier too IB had granted operating licence to three life insurance companies — IME Life Insurance, Union Life and Jyoti Insurance.
This means six new players have entered the life insurance market, taking the total number of life insurance companies in the country to 15.
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, paid-up capital requirement for life insurance companies was Rs 500 million and for non-life firms was Rs 250 million.
According to the rules, the insurance sector regulator has to first get a go-ahead from the Ministry of Finance (MoF) to grant operating licence to life insurance companies. The IB had forwarded 12 applications of life insurance companies in the third week of May to the 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 is going to expire in the third week of August.
Insurance companies have to meet the paid-up capital requirement set by the insurance sector regulator to obtain licence.
IB will issue licence to non-life insurance firms from September.
IB Chairman Chiranjibi Chapagain said the process for non-life insurance companies may not be as lengthy as the board itself can evaluate the applications of such firms. “We did not issue the licence for life and non-life insurance companies simultaneously considering the chances of high staff turnover, which could affect the service delivery of the firms in operation,” said Chapagain.
IB has received four applications for the operating licence of non-life insurance companies, namely, General Insurance, Sanima Insurance, Ajod Insurance and Manakamana Insurance. There are currently 17 non-life insurance companies in operation in Nepal.
A version of this article appears in print on August 03, 2017 of The Himalayan Times.