The Royal Insurance Corporation of Bhutan (RICB), founded by royal charter in January 1975, is the only insurance company in the kingdom and covers all classes of insurance. The government owns 39.25% while private and public shareholders own 60.25%. The RICB's 2000 shareholder are comprised primarily of civil servants and members of the business community. The Royal Insurance Corporation of Bhutan has reinsurnance arrangements with ten companies in India, Japan, Thailand, Hong Kong, Nepal, Bangladesh, and Germany.
The use of insurance, however, is limited. In 2001, there were 15,259 policy holders of general insurance, and only 4,650 holders of life insurance, the latter figure up from 114 in 1975. Within the terms of its own business, the RICB has had a steady growth in profit and assets over its 27 years of operation, but it also manages, under a Memorandum of Understanding (MOU) with the government, the rural house insurance scheme which it operates as a social welfare program in accordance with the terms of the MOU. In 2001, the rural house insurance scheme covered 31,172 permanent rural houses and 21,407 semi-permanent houses for fire, earthquake, flood, landslide, and storm, all of which are common events in Bhutan. The scheme was revised in January 2000 to give compensation of N 100,000 (about $2,150) for a permanent house with an annual premium of N 150 (about $3.23), and N 40,000 (about $860) for a semi-permanent house with an annual premium of N 60 (about $1.30). Claims have increased considerably since the revision. In 1999, under the previously less generous scheme, claims were N 2.425 million (about $52,000) against premiums of N 1.77 million (about $25,312), where as by 2001 claims had risen to N 11.292 million (about $243,000) against premiums of N 5.98 million (about $128,000). The ratio of claims to premiums has somewhat improved, from 2 to 1 in 1999 to 1.89 to 1 in 2001.