(1) A person who wants to conduct insurance business according to this Act shall establish an insurance company by registering as a public limited company in accordance with the prevailing law.
(2) Notwithstanding anything contained in sub-section (1), the commencement of this Act. An insurance company that has already been established and licensed to do insurance business does not have to re-establish the company for the same purpose.
(3) Any company or organization in which a person or his family of one family or a member of his family of one family is the basic shareholder shall not be able to invest more than fifteen percent of the paid-up capital of the insurance company established in accordance with this section. However, this provision will not be applicable in relation to the shares taken by Nepal government, state government or foreign investors.
(4) At the time of commencement of this Act, the person or organization having share ownership exceeding the limit mentioned in sub-section (3) shall maintain the share investment limit as per the same sub-section within two years from the date of commencement of the Act.
(5) In accordance with sub-section (3), a person investing in the shares of an insurance company or his family, firm, company or organization investing in another insurance company doing the same type of insurance business shall make one percent or more of the paid-up capital of such insurance company. No person can invest in shares or own shares of such company.