Section 26: Prior approval required

1) Any person willing to incorporate a public company as per section 25 to conduct insurance business has to submit an application to the Nepal Insurance Authority along with the prescribed fee for obtaining prior approval, having enclosed therewith the following documents:

(a) Memorandum of Association and Articles of Association of the proposed insurance company,

(b) Feasibility Study report and details about The personal details of applicants are infrastructures of the proposed insurance company,

(c) Personal details of applicants in the form as prescribed by the Authority,

(d) A certified copy of the agreement, if any, made between the applicants prior to the incorporation of the insurance company and its summary,

(e) Evidence of payment of taxes by promoters up to the fiscal year immediately preceding the year in which prior approval is applied,

(f) If any application is made by any body corporate, the following details:

(1) a Copy of the Board’s decision of the corporate body to incorporate insurance in the company,

(2) Memorandum of Association and Articles of association of the concerned company,

(3) Documents proving capacity to make investments,

(4) Any corporate body operating business or transactions subject to a regulatory body under prevailing laws, copy of permission granted by such regulatory body to make investment invest in the insurance business.

(g) Other details or documents specified by the Nepal Insurance Authority.

2) Any foreign insurance company, with prior approval of the Nepal Insurance Authority, may open its branch or incorporate an insurance company in Nepal in a joint venture with a corporate body registered in Nepal or a Nepali citizen.

3) Any foreign company desirous of incorporating an insurance company or opening a branch in Nepal in a joint venture shall submit an application to the Authority along with the prescribed fee for prior approval.

4) While submitting the application pursuant to sub-section 3, the following details and documents shall be included along with the application in addition to the details and document as referred to in sub-section (1):

(a) Copy of licenses of the foreign insurer obtained from the concerned country for carrying on insurance business,

(b) Copy of renewal of such license obtained from the concerned country for carrying on insurance transactions,

(c) Copy of permission granted by regulatory authority of the concerned foreign country to open a branch in Nepal,

(d) Copy of the board’s decision of such a foreign  corporate body to open a branch  or incorporate an insurance company in Nepal in a Joint Venture,

(e) Previous Five year’s audit report and audited financial statements reflecting financial capability,

(f) Name and shareholdings of directors of such foreign company and details about the corporate body in which it has a financial  interest,

(g) Other details and documents are as specified by the Nepal  Insurance Authority.

5) The Nepal Insurance Authority may, if it finds appropriate to grant approval upon examination of the application submitted for prior approval pursuant to sub-section (1) and sub-section (3) and enclosed documents, grant it approval within sixty days after filing the application, in the prescribed format.

6) If an insurer needs to amend its memorandum or articles of association, prior approval from the Nepal Insurance Authority must be obtained.