NC concludes deliberations on Financial Services Amendment Bill

The National Council concluded its deliberations on the Financial Services (Amendment) Bill 2025 on 4th June, paving the way for all insurance companies to provide both life and general insurance services.

Representing the government, Finance Minister Lekey Dorji stated that the Financial Services (Amendment) Act of Bhutan primarily serves to amend the Financial Services Act of Bhutan 2011. He said that the core reform under the amendment is the removal of restrictions on insurance providers, thereby legally allowing them to offer both life and general insurance services.

According to the Finance Minister, the rationale for the amendment is grounded in regulatory alignment, fair competition, private sector development, alignment with international practice, and the introduction of prudential safeguards.

Under the current provisions of the Financial Services Act of Bhutan 2011, Section 251(b) states that an insurer shall be restricted to writing either general or life insurance business, except where a general insurer’s life business is limited to reinsurance or a life insurer’s general business is restricted to accident and health insurance. Section 251(c) states that companies already conducting both life and general insurance business before the enforcement of the Act, referred to as composite companies, may continue to do so, provided they maintain separate bookkeeping and accounting for life and non-life insurance operations and take appropriate measures to ensure that life insurance policyholders are not exposed to losses from the non-life sector and vice versa.

The existing Act restricts insurance companies from engaging in both life and general insurance businesses, with the exception of companies that were already operating as composite insurers before the Act came into force.

The Financial Services (Amendment) Bill 2025 was passed by both the National Assembly and the National Council. The amendment seeks to lift the existing restrictions and allow all insurance companies to provide both categories of insurance services.

The adoption of the Financial Services (Amendment) Bill is scheduled for 8th June. If adopted, the amendment will come into effect from January 2027.