Insurance Board has increased the paid-up capital of insurance companies. The meeting of the Board of Directors of the Insurance Board has increased the paid-up capital of life-insurance companies to Rs. 5 billion and non-life insurance company paid-up capital of Rs. 2.5 billion.
The board took the decision to increase the overall network by increasing the paid-up capital of insurance companies, increase the risk-bearing capacity of the companies accordingly, create a conducive environment for companies to merge and strengthen the capital base, reduce the cost of services with large capital and expand access to insurance. The board has stated that it has decided to increase the capital to create an environment of healthy competition and to maintain the capital in line with the risk-based capital.
The capital should be maintained by end of next year and the companies which are unable to reach the prescribed capital within the above time period should maintain the capital in accordance with the Directive on Insurers, Mergers and Acquisitions, 2076 BS.
Similarly, the insurer registered as a foreign insurer maintains the prescribed capital equal to the prescribed minimum paid-up capital as per Section 4 of the Directive on Insurer Registration and Insurance Business Operations, 2073 and maintains the minimum capital as per Section 4 of the Directive. Arrangements have been made to do so.
There is also an arrangement for the companies to submit their capital plan to the committee within 30 days after getting a decision from the concerned board.
