KATHMANDU: The Nepal Insurance Authority has announced new measures to streamline foreign exchange arrangements related to reinsurance, aiming to make the process more efficient and transparent.
The Authority has directed all non-life insurers to submit necessary documents when seeking foreign exchange to facilitate facultative reinsurance.
According to the Reinsurance Directive, 2023, insurers must first propose reinsurance to the Nepal reinsurer and submit proof of the proposal’s rejection within 24 hours if the proposal is declined.
Additionally, when reinsuring with a foreign company, the company must be rated as per the Reinsurance Directive, 2023.
After completing foreign currency transactions for reinsurance, insurers are required to submit proof of payment receipts from the foreign reinsurer to the Nepal Insurance Authority within 15 days of the end of each quarter.
The directive also mandates that the letter requesting foreign currency exchange must be signed by the Chief Executive Officer (CEO) of the insurer. Furthermore, all documents submitted for foreign currency exchange must be signed by the concerned employee and bear the insurer’s official seal.
The move is aimed at enhancing regulatory compliance and minimizing irregularities in foreign exchange transactions related to reinsurance, thereby promoting greater accountability and transparency within the insurance sector.
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