Kathmandu. The Office of the Auditor General has called for an independent investigation into the cross-holding of founder shares in insurance companies.
In its 62nd report, the Office of the Auditor General has suggested the Insurance Authority of Nepal (INSURANCE) to independently monitor the cross-holding of the share investment of the insurer and give necessary instructions to maintain the shares of the founder or founder group within the limit.
Section 25(3) of the Insurance Act, 2079 states that a single family cannot invest more than 15 per cent of the paid-up capital of an insurance company and according to Section 25(5), no person, organization, person concerned can invest more than one per cent in any two or more insurance companies.
The Insurance Authority has pointed out the need to control cross-holding in the share investment of the insurer in accordance with the provision of the Act as there is conflict of interest when one insurance company invests in another insurance company.
