Speaking in the 51st anniversary of Insurance Board, Chairman Chiranjibi Chapagain opened an alternative path for the insurance companies to meet the minimum paid-up capital requirement.
As per Chapagain, insurance companies can borrow funds from their disaster and insurance reserve fund to meet the minimum paid-up capital requirement. "The decision has been taken considering the practical complexities of the insurance companies," said Chapagain.
From the FY 2074/75, insurance companies are required to maintain their financial report as per Nepal Financial Reporting Standards (NFRS) format. Chapagain admitted that the insurance companies are having a hard time meeting the minimum paid-up capital requirement in the given period due to deviation arose in the financial report while calculating their Liability Adequacy Test.
According to IB directive, life insurance companies and non-life insurance companies must meet the minimum paid-up capital requirement of Rs 2 billion and 1 billion respectively.
Till date, only 2 life and 4 non-life insurance companies have been able to meet the minimum paid-up capital.
