NIA grants permission for right share issuance to eight insurers to boost paid-up capital

KATHMANDU: The Nepal Insurance Authority (NIA) has authorized eight insurance companies to proceed with the issuance of right shares, a move initiated as a response to these companies’ inability to meet the required paid-up capital as specified by the regulatory body.

Within the list of companies obtaining approval from the regulatory body, an even split is observed, with four companies falling under the category of life insurance providers, and an equal number operating in the non-life insurance sector.

Raju Raman Paudel, who serves as the Executive Director of the NIA, shared that the authority has granted permission to these companies for the purpose of augmenting their capital foundations.

In the domain of life insurance, Sanima Reliance has been authorized to issue a 20 percent allocation of right shares.

Similarly, Surya Jyoti has been granted the right to release 10 percent, Prabhu Mahalaxmi 17 percent, and Asian Life Insurance has been greenlit for the issuance of 42 percent of right shares.

Among the non-life insurance entities, United Ajod has received approval to introduce 32 percent of right shares to the market.

Neco Insurance and Sanima GIC have each been permitted to issue 25 percent, while Himalayan Everest Insurance is empowered to offer 12 percent of right shares.

The NIA has established a mandate for life insurance companies, obligating them to elevate their paid-up capital from Rs 2 billion to Rs 5 billion. In a parallel vein, non-life insurers have been directed to raise their capital from Rs 1 billion to Rs 2.50 billion.

In a directive issued in April 2022, the NIA set a one-year deadline for insurers to either amplify their capital base or explore merger options should they fail to meet the specified requirements. This timeframe was subsequently extended by the regulator until mid-July 2022/23.

Fiscal Nepal |
Sunday August 27, 2023, 10:54:09 AM |

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