Kathmandu. The Insurance Institute of Nepal, established to promote formal education related to insurance in Nepal, has fallen under the shadow of the Nepal Insurance Authority. Even though the institute has been in existence for 5 years, it is still functioning as a branch of the authority.
The institute, which should be recognized as a recognized educational institution for the insurance sector at least for the purpose of promoting education and conducting educational programs, is limited to being a unit of the authority. Participants in the training programs conducted by it are not able to receive any special recognition by submitting a certificate of participation or contribute to the performance evaluation.
The focus of the institute management is limited to raising operating expenses from the funds allocated by the insurer for employee training and professional development rather than operating the institution commercially. The institute has been raising funds for the training program by sending a letter of intent to the insurers to participate in the training conducted by them.
Even after completing 5 years of operation, the institute has not been able to take on a commercial shape. It has not been able to provide returns to the investor insurers. Even the operating expenses are being met through the business obtained through the insurers.
Instead of appointing an independent and professional person after the mandatory retirement of insurance expert Bhojraj Sharma from the post of Chief Executive Officer (CEO), the NEA has appointed the NEA’s director Sushildev Subedi as the CEO and limited him to one branch of the NEA. Recently, Subedi has been promoted to the post of Executive Director of the Authority, but he has been retained as the Chief Executive Officer.
Since his workload at the Authority has naturally increased with the promotion, it is possible to estimate how much time he can devote to the Institute.
The Board of Directors can demand accountability from a professional person who is appointed as an employee by setting specific work orders and targets along with salary facilities. According to the action plan submitted by the CEOs before taking an appointment in an insurance company, there is a situation where rewards and punishments can be given based on the work done, academic progress, physical infrastructure progress, etc. of the institute. Currently, the Chief Executive Officers of the insurance companies who are on the Board of Directors of the Institute have not been able to limit the Executive Director of the Authority to the rank of CEO and have not been able to get the appointment done. He is seen as an ex-officio officer rather than an employee.
Its office and training center are being operated in the house of the Naxal. The issue of shifting the institute to a building in Chabahil owned by the authority has been pending since the beginning. No successful initiative has been taken in this regard.
Chiranjivi Chapagain, former chairman of the then Insurance Committee, said that the institute was established with two main objectives. ‘One is to provide training and the other is to develop professional insurance workers,’ he said. ‘Work is being done to conduct training, but the work of producing professional insurance workers is currently progressing at a slow pace. This should be expedited.’
According to former president Chapagain, the institute’s annual general meeting held some time ago decided to enter into an agreement with Kathmandu University to produce professional insurance professionals. ‘Now it is necessary to implement it immediately and take the work forward,’ he said.
He said that after the end of CEO Sharma’s term, the Insurance Authority had given Subedi the responsibility of CEO until further arrangements were made. “Now that Subedi has become the executive director of the authority, the responsibility of the chairman of the institute should be given to Subedi and the CEO should be appointed through open competition,” he said.
Former executive director of the Insurance Authority, Rajuraman Poudel, also says that the Insurance Authority should take steps to move forward in line with the objectives for which the institute was established. ‘The main objective of the institute is to train and produce professional insurance professionals,’ he said, ‘and it should be done accordingly.’
Poudel also said that since Subedi was recently promoted to executive director, the process of appointing a CEO to the institute should be taken forward by giving him the responsibility of chairman.
##Returns of the institute promoted by the private sector
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Finance and Insurance Institute Nepal has been providing attractive returns to investors. After the general meeting for the fiscal year 2080.81 was held, it has distributed 14.74 percent of the paid-up capital (including dividend tax) to the shareholders from the net profit. In the previous fiscal year 2079.70, it had also distributed 14.70 percent cash dividend. Its paid-up capital is Rs 49.5 million. It has also provided opportunities and scholarships to trainees for professional training and educational programs in collaboration with globally recognized organizations.
The Insurance Institute has been continuously disappointing the insurance companies in terms of return distribution. It has not been able to give even the same return as a bank’s general deposit account, and is in loss. The insurance companies along with the authority have already invested a total of Rs 200 million in the institute. Apart from the Authority, the Insurance Institute of Nepal also has an educational institution along with reinsurance, life, and non-life insurance.
##Indian Insurance Institute
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In neighboring India, the Insurance Institute of India operates as an autonomous organization. From its board of directors to the management committee, there is intervention by the regulatory Insurance Regulatory and Development Authority of India. This institute conducts examinations for licenses provided by the Authority for agents, surveyors, web aggregators, payment service providers, insurance brokers, etc. The institute is also running university-like educational programs. It is continuing to provide insurance-related training, coaching, and educational programs in collaboration with recognized educational institutions across the country.
