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Kathmandu,Tuesday January 25, 2000 Magh 11th, 2056.
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ALICO
asked to bring in foreign currency
-By a Post
Reporter
KATHMANDU, Jan 24
- Insurance Board has formally asked American Life Insurance Company (ALICO) to bring in
50 million rupees equivalent convertible foreign currency to obtain licence to operate
life insurance business in Nepal.
Insurance Board,
after a protracted debate lasting over three months, today handed a letter to the local
representative of ALICO asking the latter to furnish a documentary evidence of foreign
currency inflow among others.
The letter also
directs ALICO to abide by the necessary requirements as pointed out by Company Act 1997
and says that provisions of ALICO’s regulations will be automatically null and void
if they contradict with the existing laws of Nepal.
Though the
Ministry of Finance directed the Insurance Board to extend operating licence to ALICO in
November 5, 1999, the Board could not make a speedy decision due to divided opinion within
the board.
The board members
were divided on the issue of whether ALICO should register itself with the Company
Register’s Office under Company Act 1997 before obtaining operating licence.
Company Registrar’s
Office registers only those companies, which want to operate in Nepal as a body corporate.
ALICO is coming to Nepal in the form of branch office. Insurance Act 1992 permits the
entry of foreign insurance companies in the form of body corporate as well as branch
office.
The Board in its
letter has also informed ALICO that the company will be permitted to employ only two
foreigners as employees in its office in Nepal for initial three years. After three years
of operation all the employees in the office should be Nepalese nationals.
If granted
licence, ALICO will be the first foreign life insurance company to obtain licence in
Nepal.
Though ALICO
applied for the operating licence some one-and-half year back, it couldn’t obtain
permission due to resistance from main opposition party Communist Party of Nepal
(Unified-Marxist Leninist) and the Central Bank.
CPN-UML resisted
the entry of the multinational company on the ground that it favoured simultaneous entry
of the foreign and Nepalese aspirant companies in the life insurance sector, while Nepal
Rastra Bank opposed the entry of foreign company in the first phase.
Nepal Rastra Bank
was of the opinion that the life insurance sector should be opened to the local companies
in the first stage and than liberalize it to joint ventures and foreign companies in
sequential order, said the source.
ALICO, the American multinational is
currently operating in over 70 countries and has a reserve of over US $ 2.8 billion. The
company is currently operating in Pakistan and Bangladesh in South Asia.
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