NIA has said that insurance companies such as Prabhu Insurance, Asian Life Insurance, and Rastriya Beema Company have not made substantial efforts to raise capital. These companies have to go for mergers to increase their paid-up capital. The authority is discouraging companies to issue the right shares for the purpose of capital increment.
After the NIA issued the directive on paid-up capital increment, only four insurance companies raised their capital as per the regulatory requirement. Among the life insurance companies, the paid-up capital of Nepal Life Insurance Company is above Rs 5bn. Three non-life insurance companies - Shikhar Insurance, Siddhartha Premier Insurance, and Sagarmatha Lumbini Insurance have also met the regulatory obligation. With NIA pushing for capital increment, the majority of insurers have opted for mergers. Of the 19 insurance companies involved in the merger process, six companies have merged to become three and have started their integrated business while 13 others are still in the process of completing their mergers. NIA has recently given its final approval to the merger between IME General Insurance and Prudential Insurance. Similarly, Sanima Life Insurance and Reliance Life Insurance have also received a final nod for the merger from the regulator. In the case of insurance companies having foreign investments such as MetLife, and The Oriental Insurance, their foreign promoters are said to be injecting additional capital to meet the regulatory requirement. Meanwhile, Citizen Life, Sun Nepal Life, IME Life, and Reliable Life are yet to issue initial public offerings (IPOs).
