Insurance Companies Unable To Meet The Capital Requirement Should Go For Merger: Silwal
March 31, 2022 | Investopaper
Surya Prasad Silwal, Chairman of the Insurance Board said that the decision has been taken to increase the paid up capital of insurance companies with the objective of strengthening the insurance companies, reducing administrative costs, increasing the quality of service and increasing public confidence in insurance.
“Insurance companies have low capital, companies’ profits are declining, administrative costs are rising, insurance coverage is increasing, companies’ efficiency has not increased,” said Chairman Silwal. “If they can’t raise capital, they have to go for merger” he added.
He also stated that the board would not register new life and non-life companies and urged the insurance companies to come up with a plan to increase the paid up capital within the stipulated period and go for merger if the capital requirement could not be reached.
Earlier, the Insurance Board has decided to increase the minimum paid-up capital of life insurance companies to Rs 5 billion and non-life insurance companies to Rs 2.5 billion. The insurance companies will have to increase their paid-up capital as directed by Chaitra 2079 BS. They should also submit a plan to increase their paid-up capital to the board.
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