KATHMANDU, March 25: The Nepal Insurance Authority (NIA) has taken action against seven insurance companies, including three life and four non-life insurers, on charges of violating compliances and laws related to the sector.
According to the NIA, it has taken action against Asian Life Insurance, Himalayan Life, The Oriental Insurance, Himalayan Re-Insurance, Alliant Re-insurance Brokers Pvt Ltd, Neco Insurance and Nepal Life Insurance for not complying with various provisions of the Insurance Act. The meeting of the NIA's board of directors held last week decided to take action against these insurance companies.
Among the life insurers, Asian Life Insurance has been alleged to have breached the provision of Section 67 of the Insurance Act while purchasing the shares of City Hotel. The section states: "No business shall be done or assets shall be added in partnership with any firm, company or organization or executive head of which the operator is a member of the same household, a fundamental shareholder, a person with financial interest, the insurer or its operator is a managing agent or a shareholder." However, Asian Life has been found working contrary to this provision.
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Himalayan Life, on the other hand, has been found to have violated the rules related to salary, allowance and benefits of the chief executive officer under the guidelines of 2018. Similarly, the NIA says it took action against Nepal Life for not providing the requested details.
Among non-life insurers, Neco Insurance has been charged with selling insurance policies without receiving approval from the regulator.
Oriental Insurance, Himalayan Reinsurance and Alliant Re-insurance Brokers Pvt Ltd have been grilled in the case of reinsurance of Hilton Hotel. Surendra Thapa, CEO of Nepal Reinsurance Company (NRIC), has also been grilled in the case of Hilton Hotel, which was arsoned during the Gen Z movement.
As per the NIA's rule, reinsurance related to vandalism and terrorism risks should be done only with the NRIC. However, NRIC's CEO Thapa and three other players in the sector were allegedly found conducting reinsurance of Hilton Hotel with Himalayan Reinsurance in the beginning, while the policy was switched in the name of NRIC following the incident in which the hotel's structure was completely damaged.
According to the NIA, the accused individuals and organizations have been slapped with a cash penalty of Rs 200,000 each.
