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Insurance Companies to Raise Paid-Up Capital

Beema Samiti has decided to raise the paid-up capital of insurance companies.

The meeting of the board of directors of Beema Samiti held today has decided to raise the paid-up capital of life insurance companies to Rs. 5 Arba and that of non-life insurance companies to Rs. 2.5 Arba.

Beema Samiti believes increasing the paid-up capital has the following benefits for insurance companies:

1) Increase in the overall net worth of the companies.
2) Increase in the insurance companies’ risk-bearing capacity.
3) This move promotes mergers and acquisitions among insurance companies, hence maintaining a healthy number of insurers in the market.
4) Raising the paid-up capital enables a stronger capital base, reduces operational cost, and hence facilitates the expansion of insurance reach in the nation.

The aforementioned paid-up capital structure should be maintained by all insurance companies by Chaitra 2079. In case an insurance company can’t maintain the aforementioned paid-up capital itself, it should take the merger and acquisition route.

All insurance companies should submit their capital plan to Beema Samiti within 30 days from today.

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