Nepal Insurance Authority Introduces New Guidelines for Foreign Exchange Settlement in Reinsurance

Kathmandu – The Nepal Insurance Authority has introduced a new framework to simplify and streamline the foreign exchange settlement process for reinsurance purposes. The new guidelines mandate non-life insurance companies to submit the required documents for foreign currency exchange.

According to the new provision, insurance companies seeking to send funds abroad for facultative reinsurance must provide proof of proposal to reinsurers in line with the Reinsurance Guidelines of Insurers, 2080. Reinsurance companies in Nepal are required to submit proof of rejection of such proposals within 24 hours.

The guidelines also state that contracts with foreign reinsurance companies must comply with the Reinsurance Directive, 2080. Furthermore, insurers must submit proof of payment receipts to the Nepal Insurance Authority within 15 days after the end of each quarter.

The letter submitted to the authority for foreign currency insurance must bear the signature of the chief executive officer of the insurance company. Additionally, all verification documents must carry the company’s seal and the signature of the relevant employee.