Three life insurance companies that have recently received licenses are set to begin operations this month.
According to officials of Beema Samiti, the insurance regulatory authority of Nepal, Union Life Insurance and Sun Life Insurance commenced business last Friday whilst Jyoti Life Insurance is set to open its doors this week.
From the ten new companies, six have already received final approval from Beema Samiti to start business, reported Republica.
Beema Samiti will only issue the approvals once the insurance companies offices have been visited. This is to ensure the new company has the necessary infrastructure and systems in place ready to conduct insurance business.
The first among them to begin operations is IME Life Insurance, whilst 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.
When all of the new companies are in operation, this will bring the total number of life insurers in the country to 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 NPR2bn (USD$19.3mn) while a nonlife insurance company will have to raise its paid-up capital to NPR1bn, by mid-July next year. Currently, a life insurance company has a minimum paid-up capital requirement of NPR500mn, while for a non-life insurance company the minimum requirement stands at NPR250mn.