On August 28, 2022, NIA invited applications for the establishment of at most one (life insurance or non-life insurance) micro-insurance company in each province. A total of 31 companies applied for micro-insurance licenses.
According to the authority, only four companies have met the capital requirement to operate micro-insurance services. The minimum paid-up capital for a micro-insurance company has been set at Rs 750m. Guardian Micro Life Insurance, Crest Micro Life Insurance, Nepal Micro Insurance, and Protective Micro Insurance have raised the required capital, according to NIA. The authority has granted additional 45 days to three companies to meet the capital requirement. NIA has also issued the Micro Insurance Directive 2023 and set the business limits of micro non-life and small life insurance companies. As per the directive, micro non-life insurance companies will be allowed to insure up to Rs 5m. Similarly, micro-life insurance companies can provide insurance with a sum assured of less than Rs 500,000. Micro non-life insurance companies will be allowed to insure vehicles used in the cottage industry and agriculture sector which include tractors, trailers, thresher machines, tempo, and motorcycles. Raju Raman Poudel, executive director of NIA, said that micro-insurance companies are required to provide micro-insurance services targeting the poor, low-income groups, residents of backward areas, and marginalized communities. "The concept of micro-insurance came up after large insurance companies did not show much interest in providing insurance to people from marginalized groups and communities," said Poudel, adding, "Therefore, we have directed the micro-insurers to target people from low-income groups and marginalized communities."
