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May 2019

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Nepal: Number of life insurers expands by 6 since July to 15

Source: Asia Insurance Review | Sep 2017

Nepal Life & Health

Three life insurance firms obtained operating licences last month from  Nepal’s Insurance Board (IB), the insurance sector regulator, taking the total number of life insurance companies in the country to 15.
 
   They are Sun Nepal Life Insurance, Reliance Life Insurance and Reliable Life Insurance, reported The Himalayan Times.
 
   This latest trio of insurers to receive a licence follows close on the heels of three other companies, which were granted the licence in July. The first three were IME Life Insurance, Union Life and Jyoti Insurance.
 
   Altogether six new life insurance companies have obtained an operating licence since the IB decided in May to resume granting such licences. 
 
Increased paid-up capital requirement
The newly-approved life insurance companies had applied to the IB for a licence a decade ago. However, then-IB chairman Fatta Bahadur KC turned them down as he wanted to strengthen the capital base of the existing insurers first. 
 
   After quadrupling the paid-up capital requirement to NPR2 billion (US$19.5 million) and NPR1 billion for life and non-life insurance companies, respectively, the IB gave those companies which had submitted applications in fiscal 2007-08 three weeks’ time to re-submit applications that meet the new capital requirement.
 
   According to the rules, the insurance regulator has to first get a go-ahead from the Ministry of Finance to grant an operating licence to life insurance companies. The IB had forwarded 12 applications for life insurance licences in May to the Ministry, which deemed 10 to be eligible to obtain the licence.
 
Looking at nonlife licences
The IB will issue licences to nonlife insurance firms from this month. It has received four applications for a non-life insurance licence. There are currently 17 non-life insurance companies in operation in Nepal. A 
 
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