Additional Capital Required For Non-Life Insurance Companies

March 27, 2022 | Investopaper

With the new directive issued by the Insurance Board (Beema Samiti), non-life insurance companies have to meet the minimum paid-up capital of Rs 2.50 Arba. At current, there are 20 non-life (general) insurance companies operating in Nepal. Out of the 20 companies, two (National and Oriental) are the branches of foreign insurance companies. Hence, they are not traded in Nepal Stock Exchange (NEPSE).

These companies should increase their capital by the end of Chaitra, 2079 BS. Hence, they have one year time period to raise their capital. They can do so through merger/acquisition, issue of right shares or issue of bonus shares.

Among these insurance companies, Rastriya Beema Company (RBCL) has a lowest paid-up capital of Rs 26.66 crores. Hence, it has to raise the capital by more than 9 times or Rs. 223.34 crores. On the other hand, Shikhar Insurance (SICL) has the highest capital of Rs. 228.60 crores. SICL has to increase its capital by only Rs. 21.40 crores or 10 percent.

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The table below presents the current paid-up capital of non-life insurance companies and the additional capital they have to inject to meet the requirement set by the regulatory body.

Additional Capital Required For Non-Life Insurance Companies

S.N Non-Life Insurance Companies In Nepal Paid-Up Capital (Rs In Crores) Minimum Capital Required (Rs In Crores) Additional Capital To Raise (Rs In Crores)
1 Rastriya Beema Company 26.66 250 223.34
2 Ajod Insurance Company Limited 100 250 150
3 General Insurance Company Limited 100 250 150
4 Sanima General Insurance Company Limited 100 250 150
5 United Insurance Company Limited 102.81 250 147.19
6 Prudential Insurance Company Limited 110.85 250 139.15
7 Sagarmatha Insurance Company Limited 111.13 250 138.87
8 Siddhartha Insurance Company Limited 112 250 138
9 Prabhu Insurance Company Limited 116.19 250 133.81
10 Himalayan General Insurance Company Limited 117.35 250 132.65
11 Everest Insurance Company Limited 118.36 250 131.64
12 Lumbini General Insurance Company Limited 119.88 250 130.12
13 Premier Insurance Company Limited 122.76 250 127.24
14 Nepal Insurance Company Limited 124.23 250 125.77
15 NLG Insurance Company Limited 132.66 250 117.34
16 IME General Insurance Company Limited 162.06 250 87.94
17 Neco Insurance Company Limited 174.98 250 75.02
18 Shikhar Insurance Company Limited 228.6 250 21.4
19 National Insurance Company Limited
20 Oriental Insurance Company Limited

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One thought on “Additional Capital Required For Non-Life Insurance Companies

  • November 26, 2022 at 10:16 am

    I want to start one non life Insurance company as a startup.Do I need to have any IRDA license?
    What are the steps to register my non life insurance company?How much capital do I need to start my non life insurance business?


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