KATHMANDU, Sept 22: Three new life insurance companies that received license recently are all set to start their operation from this month.

According to officials of Beema Samiti, the insurance regulatory authority of Nepal, Union Life Insurance Company Ltd and Sun Life Insurance Company Ltd will commence their business from today (Friday).

Beema Samiti’s chairman Chiranjibi Chapagain is scheduled to inaugurate the operation of these two life insurers amid separate ceremonies being held in Kathmandu on Friday.

Likewise, Jyoti Life Insurance Company Ltd is also going to start their operation beginning from next week. 

Beema Samiti has recently provided operating license to 10 new life insurance companies, clearing all pending applications for operating licenses submitted before 2008. While the earlier leadership of Beema Samiti had not taken any decision on the 13 applications for operational license, Chapagain made a decision on the applications immediately after assuming the post of chairman. Of the 13 applications, three were rejected. 

Of the 10 new companies, six have already received the final approval from Beema Samiti to commence their business. Beema Samiti issues such approval after visiting the office of the insurance company to make sure if the new company has necessary infrastructure and system in place to do insurance business.  

Among the life insurers acquiring license, IME Life Insurance Company has already started its operation. 

Citizen Life Insurance, Star Life Insurance, Sanima Life Insurance, Reliance Life Insurance, Reliable Life Insurance and Mahalaxmi Life Insurance are still on the process to commence their business. 

Insurance experts hope that the entry of new insurers in the market will help to increase the insurance coverage that is very low at the moment. 

The competitive market is expected to push many insurance firms from urban centers to the rural areas. 

However, there are also critics who say that issuing license without any proper study could increase unhealthy competition. 

Once all the new companies start their operation, the total number of life insurers in the country will reach 19.

While new players have entered the market, those already in operation are making efforts to raise their paid-up capital in line with the new minimum requirement recently set by Beema Samiti. 

According to the new rule introduced by Beema Samiti in March, each life insurance company will have to increase its paid-up capital to Rs 2 billion while a non-life insurance company will have to raise its paid-up capital to Rs 1 billion by mid-July 2018. Currently, a life insurance company has a minimum paid-up capital requirement of Rs 500 million, while for a non-life insurance company the minimum requirement is Rs 250 million.

 
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