Introduction• Cover used for protecting oneself from the risk of a financial losses.• Risk is covered in monetary value.• Involves the Insurer and the Insured.• Insurer is the insurance company who provides the cover.• Insured is an individual who takes the insurance policy by paying a certain premium.
BAFIA 2063• The Bank and Financial Institutions Act, 2007 section 3 provides that one who is desirous to incorporate the bank and financial institutions• Required to do so by getting a public limited company registered in the concerned office.• So in order to get the incorporation and registration of bank and financial institution, there must be
BAFIA 2063• Necessary for the government to regulate banks and financial institutions in Nepal• Created under the supervision of the central bank of Nepal• Authenticated by the house of parliament• Regulated by Nepal Rastra Bank
Stages of incorporation & registration1. Approval for the Registration of bank and financial institution from NRB2. Incorporation and registration of bank and financial institution at the Office of the Company Registrar.3. License for the
Approval for registration of bank andfinancial institutions from NRB• Memorandum of Association• Articles of association• Feasibility study report• Personal particulars of the promoters in the form prescribed by NRB.• A certified copy of the agreement signed among the promoters before the establishment of the bank• Evidence of clearance of tax certificate• Other particulars and documents
Incorporation and registration of companyat the office of company registrar• Memorandum of Association,• Articles of Association,• Copy of agreement among promoters if any,• Prior approval of respective agency if necessary• Citizenship certificates of promoters or certificate of incorporation• Permission letter of doing business in Nepal if promoters are foreigners,• Certificate that prove the nationality of foreigners and certificate of
License of commencement of business byNRB• Matters concerning the maintenance of minimum capital prescribed by NRB• Matters concerning the existence of adequate bases for providing services and facilities• Matters concerning the protection of the rights and interests of depositors• Consent given to comply with the conditions prescribed by NRB
Fees for registration Range of authorized Fees allocated by BAFIA, capital Act 1 crore Rs. 150000 10000001 -100000000 Rs. 40000 100000001 -200000000 Rs. 70000 200000001 - 300000000 Rs. 100000 300000001 - 400000000 Rs. 130000 400000001 - 500000000 Rs. 160000 +500000000 Rs. 160000 + Rs. 3000 per crore
Fees for registration• 0.01% of registered capital.• The fees must be paid after all the documents were submitted to Nepal Rastra Rank .• Depends on the company’s registered capital .• Up to Rs.5,000 the payment is made.• The amount should be deposited at the Nepal Rastra Bank.• In the branch of the commercial bank permitted by Nepal Rastra Bank, in the
Problems faced while registering banks &financial institutions• Excess Bureaucracy• Conflict with promoters• Lack of proper documents• Time consuming Process• Too many directives• Others
Insurance• A practice by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium• Elements of insurable risk – Pooling of losses – Payment of accidental losses – Risk Transfer – Indemnification
Registration as per insurance act 2049• The desirous company who wants to operate life insurance business must have a authorized capital of Rupees Two Hundred Million.• The desirous company who wants to operate non-life insurance business must have a authorized capital of Rupees One Hundred Million.
Process of insurance• Selection of insurance• Proposal form• Evidence of respectability• Survey of property• Acceptance of proposal• Issue of cover note• Issue of insurance policy
Types of insurance• Fire Insurance• Marine Insurance• Life Insurance• Others – Motor Insurance – Household Insurance – Engineering Insurance – Aviation Insurance
Insurance Companies• LIC Nepal• Prime Life Insurance• Asian Life Insurance
Prime Life Insurance• Leading insurance company of Nepal• Prime Life has been able to book a net profit of NPR 87 million• Offers three important benefits to its valued customers: Savings with good returns, Life security in case of unforeseen events and Tax benefits as per Government’s Rule• Earned net profit of NPR 56.75 million in the first full year operation.• This is an unprecedented achievement in the Nepalese Life Insurance Industry
Problems faced by Prime Life Insurance• Limited scope for business• Great competition among existed companies• Lack of awareness• Educational level• One sided economic condition
Asian Life Insurance• Asian life insurance company is the first life insurance company to receive operating license from Beema Samiti.• started functioning on third April, 2008 (Chaitra 21, 2064)• Some Products: – Asian Moneyback – Asian Moneback- – Asian Child Assurance – Asian foreign employment (term)
Problems faced by Asian Life Insurance• Lack of Consumer Awareness• Lack of unstable government and policies• Lack of loyalty and sincerity• Problem of capital/income generation• Lack of necessary documents
LIC Nepal• A joint venture between Life Insurance Corporation of India (55%) and Vishal Group of Nepal (25%), the insurance company has public participation to the extent of 20%.• Life insurance Corporation (Nepal) Ltd. is instituted under the Companies Act 2053, 27.12.2000 and has Registration No: 765-057/58• It has total authorized capital of Rs 25 crores and has 11,224 shareholders.• The services provided by the LIC are:- – ACCEPTANCE OF PREMIUM – CANCELLATIONS AND SURRENDERS – CHANGE OF MODE OF PAYMENTS – NOMINATIONS – POLICY LOANS – REVIVAL OF LAPSED POLICY
Problems faced by LIC Nepal• Problems in the field of: – Insurance Committee – Customer – Agents• 1% of whatever collection of money or income they make has to be submitted to insurance committee• Among the whole population of Nepal, only 5% to 6% are covered by insurance.
Conclusion• Uncooperative environment• Lack of unstable government and policies• Lack of loyalty and sincerity• Less collaboration with bank and financial institutions for the promotion of insurance company• Problem of capital/income generation