Minimum Capital requirement Increased for Reinsurance Companies

The Insurance Regulatory and Development Authority of Nepal has decided to increase the minimum capital requirement for reinsurance companies. The regulatory authority has directed reinsurers to fulfill a minimum capital requirement of Rs. 20 Arba within one year. A meeting of the Insurance Regulatory Board held on Wednesday morning decided to present a plan within 15 days to implement the capital increase for reinsurance companies.

Currently, two reinsurance companies, Nepal Reinsurance and Himalayan Reinsurance, are operating in Nepal. The current capital of Nepal Reinsurance is Rs. 12.81 Arba, while Himalayan Reinsurance has a capital of Rs. 10 Arba. To meet the increased capital requirement, these companies may explore options such as issuing rights shares and distributing bonus shares, among other alternatives.