Paid-up capital of reinsurance companies to be raised to Rs 20 billion

KATHMANDU: Nepal Insurance Authority (NIA) has decided to raise the paid-up capital of reinsurance companies to Rs 20 billion.

NIA Executive Director and Spokesperson Raju Raman Paoudel told Himal Press said the insurance regulator has decided to seek within 15 days the plan to raise paid-up capital to Rs 20 billion within a year from reinsurance companies.

There are two reinsurance companies in Nepal. While Nepal Reinsurance Company Ltd (NRCL) has a paid-up capital of Rs 12.81 billion, the youngest reinsurer – Himalayan Reinsurance Company Ltd (HRCL) – has a paid-up capital of Rs 10 billion. HRL, which started operation in June 2021, raised Rs 3 billion from an initial public offering a month ago only. It will now have to double its paid-up capital within a year.

“We decided to raise the paid-up capital of reinsurance companies to increase their capacity to absorb risk,” Poudel added.

Earlier, NIA raised the paid-up capital of life insurance and non-life insurance companies to Rs 5 billion and Rs 2.5 billion, respectively. They were also given a timeframe of one year to meet the new capital requirement.