Government to Reinstate Mandatory 20% Reinsurance Placement With Nepal Reinsurance Company

Kathmandu — Insurance companies operating in Nepal will once again be required to place 20 percent of their total insured risk with the state-backed Nepal Reinsurance Company under a new budgetary provision announced by the government.

Finance Minister Swarnim Wagle stated in the national budget that insurers must mandatorily allocate 20 percent of their reinsurance business to the domestic reinsurer.

The provision effectively revives a policy first introduced on May 29, 2018, by then Finance Minister Yubaraj Khatiwada.

However, the arrangement was later altered on May 19, 2022, when former chairman of the then Insurance Board, Surya Prasad Silwal, made a controversial decision reducing the mandatory direct insurance share allocated to Nepal Reinsurance Company.

The move had drawn criticism at the time, with concerns raised over its legality and impact on the domestic reinsurance sector.

Following the revised allocation framework, Nepal Reinsurance Company has reportedly been receiving only around six percent of direct insurance business during the current fiscal year. Under the earlier arrangement, its share was expected to decline further to just four percent in the upcoming fiscal year 2026/27.

With the new budget set to take effect from July 17, 2026, all insurance companies will now be required to cede 20 percent of their direct insurance portfolio to Nepal Reinsurance Company.