Clarification by Insurance Authority about Premium Price IPOs, Requested not to stay on Doubt
Kathmandu: Regarding the issue of principle approval from the Nepal Insurance Authority to issue shares of premium price to four different insurers, the Authority has drawn serious attention to the fact that some selfish groups are willingly misinterpreting the provisions of the Insurance Act, 2079 B.S through some online media and spreading misleading propaganda.
The insurers are IME Life Insurance Ltd., Reliable Nepal Life Insurance Ltd., Sun Nepal Life Insurance Ltd. and Citizen Life Insurance Ltd. Four companies have been given in-principle approval from the authority to issue shares at a premium.
Under subsection (5) of the prospectus and share issuance provisions of Section 45 of the Insurance Act, 2079, “Regardless of what is written in the current law, the insurer must demand 100% of the face value of the shares when calling for applications from the general public” but those selfish media are creating confusion among the general public by spreading misinformation that the issuance of shares at a premium should not be allowed and are creating distrust towards the insurers.
The authority alleged that insurers are being misled by such unbridled propaganda by vested interest groups with the tainted intention of creating confusion among the general public, creating mistrust towards insurers, misleading investors and creating distrust towards the actions of the regulatory body by misrepresenting the legal system and disproving the legal provisions.
The authority has requested all concerned including insured, investors and general public about this issues.Under subsection (5) of Section 44 of the Insurance Act, 2079 B.S, it is mentioned that ‘other arrangements related to the distribution and sale and distribution of insurance shares shall be in accordance with the prevailing federal law related to securities’. Similarly, in accordance with the Securities Act, 2063 B.S issued by the Securities Board Nepal, Section 25 of the Securities Issuance Regulations, 2073 B.S and Section 29 of the Companies Act, 2063 B.S the insurers who have fulfilled the conditions related to the arrangement to be able to issue shares at a premium, are theoretically authorized by the authority to publicly issue shares at a premium for the general public.
It has been clarified that the approval has been given. The Authority has strongly objected to the misinformation being spread by some selfish groups by misinterpreting the existing laws and raising questions about the well-governed functioning of the regulatory bodies.