March 26: Nepal Insurance Authority has issued the 'Guidelines for Branch Offices of Insurance Companies, 2079', paving the way for Nepal’s insurance companies to expand their branches abroad.
Section 11 of the guidelines issued by the Nepal Insurance Authority on Thursday states that "insurers can open their branches, set up contact office or appoint representative abroad with the prior consent of the authority".
The insurers who fulfil the conditions set by the authority will be allowed to open their offices in other countries and expand their business after taking approval from the authority.
In order to open its branch, contact office or appoint representatives abroad, the insurer must maintain the capital determined by the authority. In case of any action taken against the insurance company and the director of the company, such company can open an office abroad six months after the completion of any such disciplinary action.
Similarly, the insurer should inform the authority about opening an office within six months after receiving the final approval from the authority. If the office is not operated within that period, the approval will be canceled automatically.
Nirmal Adhikari, information officer of Nepal Insurance Authority, said that with the release of the new guidelines, Nepali insurers who meet the criteria set by the authority for office operations will be able to open offices in other countries and conduct business.
According to the official, the Nepali insurance companies operating abroad can become a good source of foreign exchange earnings in the near future.
Chief Executive Officer of Azod Insurance Kumar Bahadur Khatri says that Nepali insurers will be able to expand their business by opening offices abroad. As a result, the insurance business will also be a good source of foreign exchange earnings, he added.
The insurance companies are now in a position to set up offices abroad due to the increase in their capital.
“Therefore, insurers can also become a good source of remittances in Nepal," he said.