Kathmandu. With only two and a half months left for the completion of the predetermined deadline, nine insurance companies, including five life insurance companies, were closed in the last fiscal year 2081. 82 actuarial valuation reports have been submitted to the Nepal Insurance Authority.
According to the Nepal Insurance Authority, MetLife Insurance, American Life Insurance, Citizen Life Insurance, IME Life Insurance, Surya Jyoti Life Insurance, and Sun Nepal Life Insurance, have submitted their report to the insurance companies.
Among the non-life insurers, Siddhartha Premier Insurance, Shikhar Insurance and IGI Prudential have registered their reports. Guardian Micro Life Insurance, a small life insurance company, has also issued a loan in the last financial year 2081. According to the NEA, it has submitted the actuarial evaluation report of 82.
Of the total 37 insurers including 7 micro-insurers, 14 life insurance companies, 14 non-life insurance companies and two reinsurance companies, only nine have submitted actuarial reports.
The Authority will approve the conditional or unconditional actuarial report after studying and analyzing these reports through its actuarial consultant. After the actuarial report is approved by the authority, the insurer has to prepare the financial report and get it approved by the authority.
As per the provision of the Insurance Act, 2079, the financial statement has to be prepared within 6 months (mid-January) of the completion of each fiscal year and submitted it to the NEA. Only nine companies have been able to prepare the report by the end of the second week of November, so only a few insurers are likely to be able to prepare the financial statements of the last fiscal year by mid-January.
According to Section 84 of the Insurance Act, 2079, the insurer has to prepare the audited balance sheet and profit or loss details of each fiscal year and submit it to the Authority in the prescribed format within six months of the next fiscal year.
The NRA can take action with cash penalty if it fails to prepare and submit the financial distribution within the stipulated time.
Insurance companies have to get the actuarial report approved by the authority before preparing the financial statement. In the actuarial report, the insurer determines the liability of the insurer, the amount to be kept for reserve and the amount of net savings on the basis of the likely financial liability to be borne by the insurer.
Just as an auditor audits the profit and loss accounts, the actuary also determines the insurer’s premium income, investment report, accepted risk, and potential liability.
After the actuarial report is approved by the Insurance Authority, the insurer can determine the distributable profit for the shareholders by determining the net savings and net profit.
