Insurance Board yet to decide on proposal to open new company

October 8: The Insurance Board has not decided what to do with an application it received to open a new life insurance company few weeks ago.

The board in the third week of August had registered an application filed by Maha Laxmi Life Insurance Company. The board has not issued new licenses for the last seven years.

The news comes as the board is preparing to amendment the Insurance Act, and set minimum paid-up capital required to open a new insurance company. The board is thinking of giving permission to new companies which can raise paid-up capital as required by the new Act, it is learnt.

However, according to a source, the proposed paid-up capital of Maha Laxmi is less than what the board has proposed in the draft Act. Maha Laxmi Life Insurance Company has a paid-up capital of Rs 1 billion.

The draft states that the life insurance companies should have at least Rs 5 billion as paid-up capital and non-life insurance should have Rs 4 billion.