Kathmandu. The Nepal Insurance Authority (NEA) has made it mandatory for foreign reinsurance broker companies to operate their offices within Nepal.
The NRA had first issued the Insurer’s Reinsurance Guidelines 2080 14 months ago, setting a deadline of six months for foreign reinsurance brokers to operate their offices in Nepal within six months.
Most of the foreign reinsurance broker companies did not follow the directives of the AUTHORITY and did not even apply to the AUTHORITY to extend the deadline. Meanwhile, the NRA has issued the first amendment to the directive on Friday and extended the deadline to bring the office into operation by mid-December.
Six months after the issuance of the Insurer’s Reinsurance Guidelines, 2080, i.e. within November 2080, the reinsurance broker should have brought the office into operation in Nepal. But no other company brought it except two.
Although a total of 54 foreign reinsurance brokers are listed in the NEA, only UIB Asia Reinsurance Broker and Synergy Re (Labuan) Limited have opened their offices.
With the increase in the size of the domestic insurance market, the NRA has issued a directive to make the office of foreign reinsurance brokers mandatory to operate in order to help them contribute to the production of skilled manpower for reinsurance brokers in the country.
NeA has made provisions for foreign reinsurance parties to set up branch offices, liaison offices or offices with joint investment in Nepal.
Foreign reinsurance brokers will have to supply manpower other than chief executive officer, information technology officer from the local market while operating the office here. NeA aims to force Nepalis under the direct supervision of foreign reinsurance brokers to acquire proficiency in reinsurance broker-related services and to provide adequate skilled manpower in the country.
A reinsurance broker has to spend at least Rs 600,000 to Rs 700,000 per month, including Rs 100,000 per month for office operation, Rs 500,000 for employee expenses and Rs 50,000 for management expenses. On this basis, it is estimated that around Rs 8 million to Rs 9 million will be spent in a year.
