Kathmandu. The government-owned life insurance company, National Life Insurance Company, has got its first Chief Executive Officer. The company’s board of directors has decided to appoint Sundar Panthi to the post of Chief Executive through an open competition.
To accelerate the transformation of this life insurance company from an institution to a company, Chief Executive Panthi will have to carry out dozens of reform tasks.
14 months after its transformation into a company, it has finally got a Chief Executive Officer. This institution was transformed into a company on 18 Kartik 2080 from the former National Insurance Institute. The company is currently operating under the Companies Act and the Insurance Act, 2079 BS. After the implementation of the Insurance Act, 2079 BS, the previous National Insurance Corporation Act, 2025 BS was repealed.
The newly appointed Chief Executive Officer Panthi has more than a dozen challenges ahead of him. He will have to be able to demonstrate effective leadership, including the role of coordinator, between the government, regulators and government employees. If his performance in the first four-year term is satisfactory, the Board of Directors may re-appoint him for another four years.
Panthi, who has a banking background, can demonstrate managerial ability and bring the company’s institutional governance back on track, and work with the understanding that the life insurance business is completely different from banking.
Challenges that need to be addressed immediately by the Chief Executive:
1) The previous institution’s ##after the financial year 2070/71 The audit report is yet to be approved. The newly appointed Chief Executive Officer will have to complete the actuarial valuation and audit work. This is the most complex and important task for the Chief Executive Officer in this government-owned company.
Nepal Rastra Bank owns 55.56 percent of the company, Nepal Bank Limited owns 16 percent, and the Government of Nepal owns the remaining. Section 44 of the Act stipulates that insurers must set aside at least 30 percent of their total issued capital for sale to the general public. The Chief Executive Officer should be able to take decisions through the Council of Ministers, taking the Ministry of Finance into confidence regarding share structure and additional capital investment.
4) Four types of employee unions are dominant within the corporation. More than a dozen issues including employee promotions, salary benefits, and position adjustments have been pending for years. These issues will not be resolved by taking the company’s board of directors into confidence alone. The Chief Executive Officer should also be able to convince the Government of Nepal, which is an investor.
