Section 39: Compulsory Reserve Fund

1) Every insurer shall maintain a reserve fund, as specified by the Board, for liability relating to the insurance business.

2) Amounts to be deposited to compulsory reserve fund (CRF) Life Insurer in accordance with sub-section (1):

(a) An amount not less than the total liability as determined by the Actuary on the basis of the Insurance Policies published by the insurer of the Life Insurance Business within Nepal.

(b) An amount not less than the amount specified by the Nepal Insurance Authority for the net insurance premium shown in the income and expenditure of a non-life insurance business.

(c) Fifty percent of the profit earned until the amount equals the paid-up capital of the insurer operating the Non-life insurance business.

3) An insurer may establish other reserve fund for operation of business, as deemed necessary,

4) Other provisions relating to the compulsory reserve fund to be maintained by re-insurance companies shall be as prescribed.

5) Other provisions related to compulsory reserve fund or other reserve funds shall be as prescribed.