Authority’s Instruction to insurance companies to keep the amount collected from the general public through Premiums in IPO separately in Reserve fund
Kathmandu : Nepal Insurance Authority has instructed the insurance companies to keep the amount of premium raised in the IPO in the reserve fund. Himalayan Reinsurance and four life insurance companies had recently issued IPOs at premium.
IME Life Insurance, Citizens Life Insurance, Sun Nepal Life Insurance and Reliable Nepal Life Insurance have brought IPO at premium. By sending notice to all these companies that are bringing IPO at a premium, the authority has instructed them to keep the 9 billion 337 million 254 thousand Rupees raised as premium in the reserve fund.
According to Insurance Authority Chairman Surya Prasad Silwal, correspondence was sent to all companies to implement the instructions. On last 28th of December, 2023 A.D the Public Accounts Committee instructed the Insurance Authority to rectify the issue of allowing insurance companies to issue IPOs at premium prices contrary to the Insurance Act. By implementing the instructions of the Audit Committee, the Insurance Authority has written to the insurance companies to keep the amount collected for the premium in the reserve fund.
Apart from Himalayan Reinsurance, it has come out that other life insurance companies have sold shares to their employees at face value and to the general public at a premium price. Himalayan Reinsurance got permission to issue a total of 30 million primary shares i.e. IPO.
Himalayan Re added a premium of Rs.106 to the marked price of Rs.100 and sold the IPO at Rs.206, which has raised three billion 180 million rupees for premium. That amount raised through the premium of IPO has been asked to be kept in the reserve fund by Insurance Authority.Citizen Life has also sold 11 million 250 thousand IPO shares. Citizen had sold 562 thousand 500 shares to employees and 10 million 687 thousand 500 shares to general public at a premium of Rs.144. Through which the citizen life has collected 1 billion 539 million Rupees from premium.
IME Life had collected 1 billion 560 million 774 thousand Rupees for premium by selling 2 million shares of IPO. The company had sold 600 thousand shares to the employees and 1.4 million shares to the general public adding a premium of Rs .136.91 in the marked price of Rs.100.
Sun Nepal life had sold 1.6 million IPO shares and collected 1 billion 267 million 680 thousand Rupees as a premium. Sun Nepal sold 480 thousand shares to employees at face value and 9.12 million shares to general public adding a premium of Rs.139 in the marked price of Rs.100.Reliable Nepal Life collected 1 billion 789 million 800 thousand Rupees as premium amount on selling 120 million IPO shares. 600 thousand shares were sold to the employees at face value and 1.4 million shares were sold to the general public with a premium of Rs.157 added to the marked price.