9 Manseer, Kathmandu. Regulatory body Insurance Committee has given new instructions by directly interfering in reinsurance of insurance companies. The committee has directed the insurance companies to undertake reinsurance only in Nepal Reinsurance and Himalayan Reinsurance which are being prepared for operation.
Insurance companies insure their customers. Insurance companies have to reinsure that insurance without having to bear all the risks themselves. Currently, insurance companies can reinsure 20 percent of domestic reinsurance companies and the rest to other companies. This has seen the domestic reinsurer monopolizing the market.
According to Rajuraman Poudel, executive director of the insurance committee, Nepalese reinsurers will now be able to reinsurance only after refusing to negotiate with foreign insurance companies. This arrangement was made after the Insurance Committee allowed Himalayan Reinsurance to operate.
According to the global recognition of insurance, reinsurance should not be done only in one’s own country. It is customary to reinsure foreign companies because insurance companies cannot handle large claims simultaneously. Nepal’s reinsurance company also brings business from abroad.
“If the insured’s reinsurance was in Nepal, the Nepalese companies would not have been able to afford it,” said the CEO of a company.
When reinsuring in foreign companies, Nepalese insurance companies alone do not have to bear all the liabilities. Even in Corona insurance, one lakh people have not been able to get payment due to non-availability of reinsurance abroad.