Insurance Authority Expands Investment Scope with New Directive 2082

Kathmandu – The Nepal Insurance Authority has issued the Insurance Investment Directive, 2082, broadening the scope of investment for life, non-life, micro, and reinsurance companies. The directive, approved on Bhadra 17, aims to strengthen regulatory oversight while creating new investment opportunities for insurers.

According to the new rules, life and micro life insurers must separately manage the life insurance fund of each portfolio, including investments from premiums and income generated, while also maintaining distinct records for shareholder funds. Investments made in term deposits of banks and financial institutions licensed by Nepal Rastra Bank, as well as in the Infrastructure Development Bank, must now be earmarked in the name of the Authority.

The revised directive increases the ceiling for investment in savings bonds or debentures of the Government of Nepal and Nepal Rastra Bank from 25 percent to 35 percent of total investments. Similarly, the investment limit in ‘A’ class banks and infrastructure development banks has been set at 30 percent, while insurers may invest up to 15 percent in ‘B’ class banks and 7 percent in ‘C’ class financial institutions.

The Authority has also expanded the scope for insurance companies in the securities market, raising the investment limit in listed companies’ ordinary shares from 10 percent to 15 percent of the total investable amount. However, insurers cannot exceed 15 percent of the paid-up capital of the company in which they invest.

Additional provisions allow insurers to invest up to 5 percent in Citizen Investment Funds and Mutual Funds and up to 10 percent in real estate ventures.