Insurance companies have been searching the sectors for investment. As per Insurance act, the investable sum of money can be invested by the insurance companies in the particular sectors as specified by the insurance board. As per the Life Insurance Company’s investment guideline, the companies can invest in the bonds of Nepal government as well as the debenture of Nepal Rastra Bank to the extent of 25% of total investment. In the fixed deposit of commercial bank as well as in the fixed deposit of development banks, 15% of total investment can be invested. Similarly, 5% of total investment can be invested under the Unit Citizen Investment scheme of Citizen Investment Trust.
Likewise, the insurer can make 10/10% investment in the fixed deposit of commercial banks, financial institutions and development banks as well as in the equity shares of public limited companies. Similarly, in the sectors of the productive as well as the sectors of national interest, 5% investment and 2% investment in the shares of investment companies can be made.
Even though the board has specified the sectors of investment but the life insurance companies are still complaining the unavailability of long-term investment sectors. The liability of the life insurance companies being of long-term but the sectors of investment being short term, the companies’ claim of their inability to reap the maximum benefit. So, seeing the international practice, the government should specify new sectors of investments for the life insurance companies, says the head executive officer of Nepal Life Insurance Company, Vivek Jha. According to him, the life insurance companies should be permitted to invest in the sectors of corporate, housing, real estate as well as in the retail sectors. The board may, however, specify some statutory limit on percentage.
The Investment particulars of Life Insurance Companies since past 5 years
As per the statistics of the insurance board, in past 5 years, the investment of the insurance companies has increased by two times. As per the statistics of the board, in the financial year 2069/70, 64 billion, 3 hundred 40 million of investment was done by the companies. Similarly, in the financial year 2070/71, 79 billion, 1 hundred 20 million rupees were invested in various sectors by the companies. In the financial year 2071/72, 93 billion, 8 hundred 80 million rupees was invested. Coming to the financial year 2072/73, the investment of the life insurance companies has reached 93 billion, 8 hundred 80 million rupees. In the financial year 2068/69, companies had invested only 54 billion, 5 hundred million rupees.
In the past 5 years period, the investment of Nepal life Asian Life, Surya life, Gurans Life, and Prime Life has increased by more than 3 times. The investment of Rastriay Bima Sansthan has however decreased by 19%. Likewise, the investment of Met Life Insurance has increased by nearly two times and the investment of Life Insurance Corporation has increased 2 times. Similarly, the investment of National Life Insurance has increased by more than 2 times.