Rs. 50 Million Capital Mandatory for Reinsurance Broker: Beema Samiti
November 30, 2021 | Investopaper
The Insurance Board (Beema Samiti) has set a paid-up capital of Rs 50 million to operate a brokerage company for the reinsurance business. However, the foreign insurance brokerage company should have a capital of 50,000 US dollars. Foreign companies can only operate branches in Nepal.
A reinsurance broker is a company that works between an insurance company and a reinsurance company. Such brokerage firms also provide reinsurance advice and suggestions to insurance companies.
For the application to open the reinsurance broker, the company has to submit the AOA, MOA, feasibility study, KYC of the promoter, clear details of the source of investment, certificate of tax clearance, proof of decision of the foreign company’s board to establish a branch in Nepal.
Nineteen companies have applied to the Insurance board seeking licenses from reinsurance brokers. Among the applicants, 18 are Nepali companies and one is foreign. The board had issued the Reinsurance Directive 2078, on Bhadra 29, 2078 BS for the distribution of the reinsurance broker license.
Currently, most of the insurance companies in Nepal are reinsuring through Indian reinsurance brokers including JB Boda (India), Pioneer Insurance Broker (India), and Frost Policy Insurance Broker (India). The companies are doing the reinsurance in Swiss Re (Switzerland), JB Boda Reinsurance Company (India), General Insurance Corporation (GIC) (India), Hanover Re (German), Trust Re (Bahrain), etc.
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