Section 25: Incorporation of Insurance Company

1) Any person who is desirous of undertaking an insurance business according to this Act shall have to incorporate it by getting such insurance business registered as a public limited company in accordance with the prevailing laws.

2) Notwithstanding anything contained in sub-section (1), provided that the insurance companies that have already been incorporated and are in operation during the commencement of this Act are not required to be incorporated.

3) Any person or his family members or a corporate body in which he or his family members have a substantial interest shall not invest more than 15% of the paid-up share capital of the insurance company to be incorporated under this section.

However, it shall not be applicable in case of shares subscribed by the Government of Nepal, Province Government or Foreign Investors.

4) Any person or entity holding shares of insurance companies in limits more than prescribed under sub-section 3, such person shall, within 2 years from the commencement of this Act, maintain the share investment within specified limits.

5) While investing in other insurance companies by any person or their family member, firm, company or institution having investment in one insurance company pursuant to sub-section (3), investment shall have to be made subject to be less than one percent of the paid-up capital of said insurance companies.