Insurance Act, 2022

26. Prior Approval to be Obtained: (1) A person desiring to establish a company under Section 25 for conducting insurance business shall submit an application to the Authority for prior approval with the prescribed fee and attaching the following documents:-

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

(b) Feasibility study report and infrastructure details of the insurance business,

(c) Personal details of the founders in the format prescribed by the Authority,

(d) Certified copy of any agreement made among the founders prior to the establishment of the proposed insurance company, and a summary thereof,

(e) Proof of tax payment by the founder up to the previous fiscal year immediately prior to submitting the application for prior approval,

(f) If an organized entity has submitted the application, the following details:-

(1) Decision of the Board of Directors regarding the establishment of the insurance company,

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

(3) Documents as prescribed confirming capability to invest,

(4) If the entity conducts business or transactions regulated under prevailing law, permission from the regulatory body of such entity to invest in insurance business.

(g) Other details and documents determined by the Authority.

(2) A foreign insurance company may, with prior approval of the Authority, establish an insurance company in joint investment with an organized entity of Nepal or a Nepali citizen, or open a branch office in Nepal.

(3) If a foreign insurance company desires to establish an insurance company in joint investment or open a branch office in Nepal under sub-section (2), it shall submit an application to the Authority for prior approval with the prescribed fee.

(4) While submitting the application under sub-section (3), the applicant shall, in addition to the details mentioned in sub-section (1), attach the following details and documents:-

(a) A copy of the license obtained for carrying out insurance business in the concerned country,

(b) Proof of having updated and renewed the license for carrying out insurance business in the concerned country,

(c) Proof of approval granted by the regulatory body of the concerned country to open a branch office in Nepal,

(d) Decision of the Board of Directors of the concerned insurance company regarding establishing an insurance company in joint investment in Nepal or opening a branch office,

(e) Audit reports of the last five fiscal years of such company showing financial capability,

(f) List of directors of the foreign entity and ratio of share ownership and details of entities having financial interest,

(g) Other details and documents determined by the Authority.

(5) Upon examining the application received under sub-section (1) or (3), if it appears appropriate to grant prior approval for establishing an insurance company or opening a branch office in joint investment in Nepal by such insurance company or foreign insurance company, the Authority shall grant prior approval to the applicant in the prescribed format within sixty days of the application.

(6) If an insurer has to amend its Memorandum of Association or Articles of Association, it shall obtain the prior approval of the Authority.