This month will see three new life insurance companies, that received licences recently, start operations.
According to officials of Beema Samiti, the insurance regulatory authority of Nepal, Union Life Insurance and Sun Life Insurance commenced business last Friday. Jyoti Life Insurance is set to open its doors this week.
Beema Samiti recently granted insurance licences to 10 new life insurance companies, clearing all pending applications for operating licenses submitted before 2008. Of the 13 pending applications, three were rejected.
Of the 10 new companies, six have already received final approval from Beema Samiti to commence business, reported Republica. Beema Samiti issues such approval after visiting the office of the insurance company to ensure the new company has the necessary infrastructure and system in place to conduct insurance business.
The first among them to commence operations is IME Life Insurance.
Citizen Life Insurance, Star Life Insurance, Sanima Life Insurance, Reliance Life Insurance, Reliable Life Insurance and Mahalaxmi Life Insurance are still in the process of preparing to open for business.
Insurance experts hope that the entry of new insurers in the market will help to increase insurance coverage in the country. The competition in the market is expected to push many insurers from urban centres to the rural areas.
Once all the new companies start their operation, the total number of life insurers in the country will reach 19.
Meanwhile, the nine life insurers in operation before the 10 new licensees came into the picture are making efforts to raise their paid-up capital in line with the new minimum requirements recently set by Beema Samiti. The new regulations require each life insurance company to increase its paid-up capital to NPR2 billion (US$19.3 million) while a nonlife insurance company will have to raise its paid-up capital to NPR1 billion, by mid-July 2018. Currently, a life insurance company has a minimum paid-up capital requirement of NPR500 million, while for a non-life insurance company the minimum requirement is NPR250 million.