Beema Samiti to urge insurance company for merger

Beema Samiti has started to urge insurance companies to go in merger process. As the insurance companies are lacking to provide quality services to people the insurance companies are being forced to go into merger. Bema Samiti is pressurizing insurance companies as it has come up with the conclusion that insurance company with less paid up capital cannot expand its business. Many insurance companies are yet to meet the paid up capital requirement as set by Beema Samiti. Merger has been taken as the best option by Beema Samiti. The regulating body had fixed a paid up capital of life insurance company and non-life insurance company to be Rs 50 crore and Rs 25 crore respectively. According to Rajuraman Poudel, Director of Beema Samiti, ‘Some insurance companies paid up capital still remains at Rs 12-13 crore.’ An insurance company should have at least Rs 4-5 arba paid up capital as per the Samiti. ‘There is no future of insurance companies with less paid up capital.’ Added Mr poudel. Beema Samiti has prepared draft on insurance act. As per the draft, Life Insurance Company will need to have Rs 5 arba and Non-life Insurance Company is supposed to have Rs 4 arba at minimum as paid up capital.The draft  has been forwarded to Ministry of Finance (MoF) .However MoF has not decided anything about the issue. ‘The increasing number of insurance companies has led to the idea of paid up capital increment.’ said Mr poudel. Beema Samiti has barred providing license to new insurance companies. Remittance company, bank and financial institution have also started applying to open an insurance company. At present, there are 9 life insurance and 17 non-life insurance companies. Source: Nagarik