Regulator Silent as Family Shareholdings Exceed Legal Limits in Micro insurance Companies

Kathmandu — Nepal’s insurance regulator, Insurance Authority Nepal, has come under scrutiny for remaining inactive despite clear evidence that shareholdings in microinsurance companies exceed the legal cap of 15% for a single individual or family. The lack of action has raised concerns among observers. Under the Insurance Act 2022 Nepal, no individual, their immediate family, or any entity in which they are major shareholders is allowed to own more than 15% of the paid-up capital of an insurance company.

Section 25 of the Act explicitly bars such concentrated ownership. However, despite visible instances of violations in microinsurance firms, no formal investigation has been initiated. For example, the annual report for fiscal year 2024 to 2025 of Liberty Micro Insurance shows that Langtang Investment and Paldor Investment each hold 21.43% stakes.

Likewise, a credit rating report published on October 17, 2025 by ICRA Nepal indicates that Lobuche Investment and Ghandruk Investment each own 21.4% of Star Micro Insurance. The Act also prohibits cross-holding among companies engaged in similar lines of business. Despite this, several business groups, including the Shankar Group, have invested across multiple companies as founding shareholders, resulting in cross-ownership structures.

Such cross-holdings extend to microinsurance firms as well. In Guardian Micro Insurance Company, SG FinCorp, owned by Shankarlal Agrawal, chairman of Shankar Group, holds a 15% stake. Similarly, in Nepal Micro Insurance, Central Capital, owned by his son Sahil Agrawal, holds 9.76%, while Sarathi Capital, registered under Subhi Agrawal, holds 14.86%.