IB places moratorium on non-life insurance cash dividend

ShareSansar, May 22:

Insurance Board has instructed non-life insurance companies not to distribute cash dividends to shareholders from the profit earned in the last fiscal year.

The destruction caused by the devastating earthquake has drastically increased liabilities of the insurance companies, therefore, we have barred them from distributing dividends, said Insurance Board Director Raju Raman Poudel.

“Given the situation, except for emergency needs, the insurance companies must do everything they can to save their money for settling claims,” he added. Poudel said the companies are free to issue bonus shares as that will help increase their capital.

The Insurance Board has asked the insurance companies that have not held their AGM even though their financial reports have been approved not to distribute the dividends.

Only last year, the board had asked insurance companies not to give away dividends more than 20% of the distributable profit.