Splitting of non-life insurance business from Rastriya Beema Sansthan underway

KATHMANDU, SEP 01:

The Ministry of Finance has initiated the process of splitting the non-life insurance business of the state-run Rastriya Beema Sansthan.

The insurance company had recently forwarded the necessary documents, including its rules and prospectus, to set up a new non-life insurance company.

“After receiving the documents, we have started the preparation to separate the non-life insurance from the Sansthan,” said Krishna Prasad Devkota, a joint-secretary at the ministry.

The cabinet needs to give the final approval for the formation of such company as per the Company Act.

The finance ministry has recently written to the Employees Provident Fund and Nepal Bank Limited and the Beema Santhan´s shareholders, seeking their approval for separating the non-life insurance business.

“We are hopeful that this process will make headway this time around,” said Ram Bahadur Khadka, an administrator at the Beema Sasthan.
Several attempts for the past 18 years to separate the non-life insurance business had failed due to the protest by the trade unions.

Rastriya Beema Sansthan Act 1967 was then revised in 1995, and the non-life insurance provision was omitted from the Act.
“As the split has now become inevitable, we have decided to support the process,” said Nawaraj Mudbhari, a trade union leader at the Sansthan. “However, we want our concerns addressed while the new company is established.”

There are eight life-insurance companies and 17 non-life insurance companies operating in the country according to the Insurance Act 1992.

Source: Republica