Nepal Insurance Authority to Extend Capital Increase Deadline for Reinsurance Companies

Kathmandu – The Nepal Insurance Authority is set to extend the deadline for the capital increase of two reinsurance companies—Nepal Reinsurance Company and Himalayan Reinsurance by one year.

The decision follows the Government of Nepal’s indication that there is no immediate plan to raise the capital of state-owned Nepal Reinsurance Company. An official from the Authority confirmed that Acting Chairman Madan Dahal, who also oversees responsibilities for the Ministry of Finance, has taken the decision to provide additional time.

Private reinsurance companies preparing to raise capital will also benefit from the one-year extension. Previously, reinsurance companies were required to increase their paid-up capital to Rs 20 billion by the end of the Magh month. However, the new extension allows more flexibility for meeting this requirement.

Currently, Nepal Reinsurance Company has a paid-up capital of over Rs 13 billion, requiring an increase of at least 56%. Similarly, Himalayan Reinsurance has a paid-up capital of Rs 10.4 billion. Companies can meet the new capital requirement through bonus shares, right shares, or further public offerings.

The Insurance Authority emphasized that this extension is crucial to align reinsurance companies with increased capital requirements for life and non-life insurance companies, set at Rs 5 billion and Rs 2.5 billion, respectively.