(1) Notwithstanding anything contained in Section 26, the Authority may refuse to grant prior approval to establish an insurance company or to open a branch office of a foreign insurance company in any of the following cases:-
(a) If the name of the proposed insurance company matches the name of an insurer already registered,
(b) If the name of the proposed insurance company or the insurance business carried out by it is found to be inappropriate or undesirable from the point of view of public interest, morality, etiquette, religion, caste or sect or public order, (c) study the feasibility study report, detailed documents and other infrastructure submitted by the applicant. If the insurance business market is limited and more insurance companies are given licenses, if it is not believed that the insurance business can be operated in a healthy and competitive manner,
(d) If the purpose of the proposed insurance company is or appears to be contrary to the prevailing law,
(e) If the documents and details specified by the authority are not submitted according to section 26,
(f) If each founder does not agree to buy at least 10,000 shares of the proposed insurance company or does not clearly disclose the number of shares to be bought,
(g) If the proposed insurance company does not propose to maintain default capital as per section 36,
(h) If any of the founders of the proposed insurance company has been convicted by a court for any offense related to insurance, banking offences, fraud, forgery, embezzlement, money laundering, corruption, human trafficking, kidnapping or any other offense of moral turpitude such as hostage-taking, for five years after serving such sentence. If not, (j) if the proposed insurance company intends to do other business besides insurance business,
(h) In cases where pre-approval is prohibited under section 31,
(k) If no founder of the proposed insurance company or any member of his immediate family has been blacklisted in accordance with the prevailing law for three years, (g) Fifteen percent or so of the capital agreed to be paid up immediately by the founders of the proposed insurance companyIf the majority of shares are owned by a single person, single family, organization or group, this provision will not apply to the shares taken by the Nepalese government, provincial government or foreign investors.
(d) If he or his single family has a basic share in an insurer carrying on the same type of insurance business.
(2) Notwithstanding anything contained in sub-section (1), the authority shall not give prior approval to establish any company to carry on more than one type of insurance business except reinsurance business. (3) If the authority refuses to give pre-approval for the establishment of an insurance company in accordance with this section, it shall give written information to the applicant with the reason within sixty days of the application.