Nepal Insurance Authority Extends Deadline for Foreign Reinsurance Brokers to Open Local Offices

Kathmandu – The Nepal Insurance Authority has extended the deadline for foreign reinsurance brokers to establish branch or liaison offices in Nepal, granting an additional six months despite non-compliance with earlier directives. The extension allows reinsurance brokers until the end of Poush 2082 B.S. to comply with the requirement, which was originally set for Ashar 2081 B.S.

The Authority had initially mandated that all foreign reinsurance broker companies conducting business with Nepali insurers must register with the Authority and open physical offices within Nepal. The aim of the directive, first issued in 2080 BS, was to enhance oversight, ensure accountability, and promote regulatory transparency in the reinsurance segment. However, several registered brokers failed to meet the requirement within the initial timeline.

While the directive had made the opening of local offices mandatory, the Authority stopped short of taking punitive action against the defaulters. According to a senior official at the Insurance Authority, the governing Act lacks a clearly defined provision for sanctions against foreign broker companies that ignore such regulatory instructions. This legal gap, the official noted, contributed to the decision to revise the directive and offer an extension rather than initiate enforcement actions.

The revised instruction, issued formally to concerned stakeholders, now requires that all reinsurance brokers holding a registration number with the Authority must establish either a branch, liaison office, or joint venture entity in Nepal by Poush. The Authority had even sent written notices to non-compliant brokers on Chaitra 10, 2081 B.S., urging them to meet the original three-month deadline, but the response remained unsatisfactory.

In Nepal’s insurance market, reinsurance transactions can be carried out either directly with reinsurance companies or through registered brokers. In both cases, foreign entities must be formally recognized by the Nepal Insurance Authority to conduct business with domestic insurers. The provision requiring brokers to maintain a local presence is intended to ensure closer regulatory supervision and improved service delivery.