Government Implements Insurance Regulations 2081 to Enhance Transparency and Management

Kathmandu – The government has enforced the Insurance Regulations, 2081, introducing stricter policies to improve regulation, management, and transparency in the insurance sector.

Under the new regulations, educational qualifications for insurance agents have been revised. Existing agents must have completed the School Leaving Certificate (SLC) for license renewal, while new agents must have passed Grade 12. Additionally, mandatory special training and examinations have been introduced for aspiring agents.

The regulations also introduce structured processes for insurance brokers and third-party facilitators, requiring them to obtain official licenses. Insurance agents must now sell specific bonds and meet renewal criteria to continue their practice.

To strengthen oversight, the regulations mandate the formation of a management group to monitor the insurance market, conduct studies, and formulate policies on a quarterly basis. A separate Risk Management Committee will be established to ensure financial stability and mitigate risks in the sector.

New insurance companies must seek prior approval from the Insurance Authority, submitting a capital structure, financial statement, and business plan before operation. Similar approval is required for branch expansion and foreign investment. Furthermore, insurers are required to maintain a fixed capital fund and solvency margin, with additional reserves such as the Insurance Fund, Mandatory Reserve Fund, Special Reserve Fund, and Claim Payment Fund introduced to stabilize the industry.

In an effort to increase transparency in transactions, all insurance payments must now be processed through banks. The regulations also allow installment-based payments for engineering and aviation insurance. To minimize risks, reinsurance has been made mandatory, with international reinsurers required to meet criteria set by the authority.