Moreover, IB directed that only if domestic reinsurance companies decline to accept the risk involved, the companies can reinsure the polices with international reinsurance companies.
An expert view that the risk is best diversified, however, the direction given by IB countering the fact is against international principles. ‘Such directive is practices nowhere in the world; thus, it is better not implemented,’ he added.
The board directed companies to reinsure with domestic two companies including Nepal Reinsurance company and recently opened Himalayan Re Insurance. Till date, Nepalese companies are reinsuring with both domestic and foreign companies. While reinsuring with foreign companies, insurance companies spent nearly Rs 6 billion. IB claims that the reinsurance with domestic companies will save the amount within the country.
