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Kathmandu Friday April 27, 2001 Baishakh 14, 2058.
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NLIC receives
operation license
Post Report
KATHMANDU, April 26 - Nepal Life Insurance
Company (NLIC), which received operating license from the Insurance Board, the apex body
that regulates insurance business in Nepal, last week, is to begin its operations from the
first week of May.
The government six months ago had granted
permission to NLIC, promoted by the Bishal Group, for the operation of life insurance
business in Nepal.
As per the existing insurance act, the board
itself can grant permission for the operation of non-life insurance businesses. However,
in the case of life-insurance business, the Board needs to obtain permission of the
Ministry of Finance to issue the operating license.
After opting for liberal economic policies in
1992, more than 12 life-insurance operational license have been issued. Presently, only
the state owned Rastriya Beema Sansthan and Nepal Life and General Insurance Company are
operating life insurance business in Nepal.
Earlier the government had granted license to
American Life Insurance Company, a multinational insurance company, allowing the entry of
the first-ever-foreign company. However, the company is yet to receive the license, which
sources said is at final stages of issuance.
In addition, three companies (Nepal Life
Insurance Company, Kantipur Life Insurance Company and Laxmi Life Insurance Company) over
a year ago had applied for operating life insurance schemes. The Board is yet to grant
operational permission. Related businessmen have lamented over the Board’s
indifference to grant permission of operation to these companies.
Life Insurance sector still remains one of
the most untapped areas for business. Studies have shown that only 0.7 percent of the
eligible (in terms of their age) Nepali have opted for life insurance. The studies also
show that there is a premium market of over one billion rupees, over 500 million rupees of
which out-flow to India from the Terai belt alone.
The NLIC has a paid up capital of Rs 250
million. 20 per cent of its shares are to be publicly issued.
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