Non-Life Insurance Professionals Call for Policy Revisions on Shares and Reinsurance Allocation

Kathmandu — The Nepal Non-Life Insurance Professionals Association has called for critical policy reforms in the insurance sector during a formal meeting with newly appointed Insurance Authority Chairman Sharad Ojha today.

The Association Chairman Rajendra Malla, congratulated Chairman Ojha on his appointment and submitted a list of concerns related to the current regulatory environment affecting the non-life insurance business. The Association emphasized that certain existing provisions are proving impractical and are hindering both investment flexibility and business growth.

A major concern raised was the restriction imposed on company directors regarding share transactions. As per Rule 38 (1A) of the Securities Registration and Issuance Regulations, directors are prohibited from buying or selling company shares while in office and for one year after leaving their position. The Association argued that this rule unfairly limits the financial rights of directors, who are also shareholders, and creates barriers to personal financial planning and business diversification.

The Association has urged the Authority to consider amending the rule to allow directors to sell a portion—up to 50 percent—of their shares during their tenure, a move they say would strike a balance between governance and investor freedom. They also cautioned that such restrictions could negatively impact the broader investment climate and deter foreign investment.

In addition, the Association voiced concerns regarding the mandatory allocation of direct reinsurance shares to domestic reinsurance companies. Citing Sections 2 and 80 of the Insurance Act 2079, the Association argued that the current practice of assigning a fixed 6 percent share of risk to two Nepali reinsurance firms contradicts the Act’s spirit, which envisions risk-sharing based on agreements rather than mandates.

The Association recommended revising the reinsurance structure so that insurers retain the freedom to allocate risks beyond those already covered by agreement, ensuring compliance with the Act and promoting fair competition.

Officials present at the meeting included Ajad Shrestha, Ramesh Niraula, Bal Krishna Shrestha, and Kunal Kayal. The Association hopes the Authority will consider these issues seriously and initiate necessary reforms to support a more equitable and dynamic insurance sector.