Clarification by Insurance Authority about Premium Price IPOs, Request not to be Confused
KATHMANDU: Regarding the issue of in-principle approval from the Nepal Insurance Authority to issue shares of premium price to four different insurers, the authority has drawn serious attention to the fact that some interest groups are willingly misinterpreting the provisions of the Insurance Act, 2079 and spreading misleading propaganda through some online media.
The insurers are IME Life Insurance Ltd., Reliable Nepal Life Insurance Ltd., Sun Nepal Life Insurance Ltd. and Citizen Life Insurance Ltd. 4 companies have been given in-principle approval from the authority to issue shares at a premium and in subsection (5) of the prospectus and share issuance provisions of Section 45 of the Insurance Act, 2079, “Despite what is written in the prevailing law, when the insurer calls for applications from the general public for the purchase of shares, the face value of the shares 100% amount will have to be demanded’
Disregarding the legal provision that shares issuance should not be approved at premium, insurers should not be misled and misled by vested interest groups with the tainted intention of creating confusion among the general public, creating mistrust towards insurers, confusing investors and creating distrust towards the actions of regulatory bodies. Authority has requested all concerned including insured, investors and general public.
>In subsection (5) of Section 44 of the Insurance Act, 2079, it is mentioned that ‘other arrangements related to the distribution and sale and distribution of insurance shares shall be in accordance with the prevailing federal law related to securities’, the Securities Issuance Regulations issued by the Securities Board Nepal in accordance with the Securities Act, 2063 In premium as per section 25 1 and section 29 of the Companies Act, 2063
It has been clarified that the authority has given theoretical approval according to the law to the insurers who have fulfilled the conditions related to the arrangement to be able to issue shares.
The Authority has strongly objected to the misinformation being spread by some interest groups by misinterpreting the existing laws and raising questions about the well-governed functioning of the regulatory agencies.