Kathmandu. The provisions related to risk-based capital calculation issued by the Nepal Insurance Authority in the previous fiscal year 2080. It has been partially implemented since 81.
With the full implementation of this provision, nepal life insurance and national life insurance, the two leading life insurers based on old and business size, have mentioned in detail in the report about risk-based capital and adequacy of available capital funds in their annual financial statements.
Nepal Life’s fiscal year 2080. According to the financial statement of 81, the size of its risk-based required capital is Rs 16.53 billion. According to the financial statement, the size of the capital resources that can be available immediately with the paid-up capital of Rs 8 billion of the company is Rs 23.96 billion. On this basis, additional capital of Rs 7.42 billion is available over the financial liability. Its solvency ratio is 144.9 percent.
National Life Insurance’s previous fiscal year 2080. The risk-based capital requirement stands at Rs 8.67 billion as of 1981, while its available capital fund is Rs 10.35 billion.
Calculating risk-based capital ensures that the insurer has sufficient financial resources that can be counted as capital to bear all the risks associated with the operation of the insurance business.
In the calculation of such capital, considering the risk of interest rate, regulatory risk, disaster risk, etc., the capital needed to cope with the potential impact on the financial health of the insurer due to these risks is determined.
