The demand is put forward by umbrella organizations of life and non-life insurance companies Nepal Life Insurers’ Association companies and Nepal Insurers’ Association. They are preparing to send official letter demanding rectification of the decision.
Chunky Shrestha, General Secretary of Nepal Insurers’ Association said that the domestic reinsurance companies cannot solely take such a huge risk. Risk should be spread out to mitigate. In case of disaster, a single company cannot handle all the risks. Thus, both life and non-life insurance companies have decided to write to IB demanding an altercation of the direction.
The insurance companies have also warned of further protest if the decision is not rectified.
Experts have also said that the IB directive given to insurance companies is against the principle.
Last Thursday, on November 26, IB directed life and non-life insurance companies to purchase 100 percent reinsurance policies with domestic reinsurance companies.
The regulatory body directed both life and non-life insurance companies to transfer their risks to foreign reinsurance companies only if the domestic company refuses.
Currently, all life and non-life insurance companies operating in the country should reinsure at least 20 percent of policies with government-owned Nepal Reinsurance Company.
The board issued the directive following the opening of Himalayan Re a new private sector reinsurance company.
