Nepal Insurance Authority Set to Increase License Fees for New Insurance Companies

Kathmandu – The Nepal Insurance Authority is preparing to introduce a significant hike in the license fees for new insurance companies. Currently, the license fee to register a new company stands at Rs 50,000, as mandated by the Insurance Act 2049. However, the Authority is now proposing to increase this amount to a range of Rs 5 million to Rs 100 million.

The proposal to raise the fees has been discussed before but was not moved forward due to the board’s reluctance. Board officials had previously argued that, with no immediate plans to issue licenses, it was unnecessary to proceed with the proposal. However, internal discussions among senior officials have recently reignited the push for revising the fees.

At present insurance companies in Nepal are required to pay Rs 50,000 when applying for a license, with no additional charges for pre-approval or final approval. An annual renewal fee of Rs 50,000 is also in place. However, the proposed regulations aim to overhaul this system by introducing a tiered fee structure.

The proposed system, detailed in the Insurance Regulations 2081 BS submitted to the Council of Ministers, assigns different fees based on the type of company. Under the new structure, micro insurance companies would pay Rs 100,000 for pre-approval and Rs 5 million for final approval. Non-life insurance companies would face fees of Rs 250,000 for pre-approval and Rs 25 million for final approval. Life insurance companies would be charged Rs 500,000 for pre-approval and Rs 50 million final approval, while reinsurance companies would need to pay Rs 1 million for pre-approval and Rs 100 million for final approval. The regulations also propose eliminating the provision for license renewal fees altogether.

The Authority has cited the outdated nature of the current regulations as the main reason for the proposed changes, stating that the revisions are necessary to align with modern financial and regulatory practices. An official from the Authority confirmed that preparations are underway to update the Insurance Act 2049 to reflect these changes.

If implemented, the new fee structure would significantly increase the cost of entering Nepal’s insurance market.