February 28, 2022 | Investopaper
Insurance companies opting for merger will get additional incentives. Facilities such as no cooling off period for the sale of promoter shares, two-year time limit to settle cross-holding share, additional board of directors, and extension of individual crossholding limit etc. will be provided to the companies that undergo into merger/acquisition.
The Insurance Board has stated that these facilities have been added for the purpose of encouraging the insurance companies for mergers and acquisitions amending the ‘Directive on Mergers and Acquisitions 2076’. Although the board issued the ‘Directive on Mergers and Acquisitions’ in 2076 BS, not a single merger or acquisition has taken place yet.
The directive also provides for the facility to remain in the post of the old board of directors for a period until the re-election after the merger or acquisition, even if the election is to be held after the expiration of the term of the chairman.
Even though the state has given priority to the insurance sector, about 65 percent of the total population of the country still does not have access to insurance. According to the Insurance Board, only about 35 percent of the population has access to insurance by Poush, 2078 BS. This includes insurance of those who have gone for foreign employment.
At present, there are 19 life insurance companies, 20 non-life insurance companies and 2 reinsurance companies operating in the country. Various insurance companies have been providing insurance services across the country through 3279 branch offices.
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