Kathmandu. The Nepal Insurance Authority(NIA) has been conducting on-site and off-site supervision of various insurance companies as a model throughout the year. Such supervision work continues one after another in life, non-life, micro and reinsurance companies.
The purpose of such work, which falls under the regulatory responsibility, is to find out whether the transactions and activities carried out by the insurer are in accordance with the rules or not. Ironically, the employees deployed for this work have a different purpose behind on-site inspection and monitoring.
Most of the employees working in the authority (except for newly recruited ones) have immediate family members or very close relatives who are employed in some insurance office due to the authority’s positional influence. Husbands, wives, sons, daughters, daughters-in-law, nephews, nieces, sisters, sons-in-law, nephews, brothers-in-law, sisters-in-law, and all other relatives have been employed by the Authority’s employees as much as they can through their own influence.
Anyone can guess what ethics and how responsibly the Insurance Authority employees, who are assigned to inspect and monitor the work done by their own family members or close relatives, are working.
The Authority’s employees camp at the insurer’s office for 10 days a week for on-site inspections and eat and drink at their tables. In the meantime, the insurer often orders a serious investigation into the matter of repeating errors. They examine the details in the documents and the insurer’s software and even find serious errors. In this, the issue of money laundering is detected at first sight.
The Authority has found serious issues such as accepting insurance proposals and issuing insurance policies without proof of income source, making investments indiscriminately in a conflict of interest, paying claims without sufficient documentation, spending more than the specified limit under the heading of agent expenses, spending non-transparently on advertising expenses, and taking on more risk than the capacity without adequate reinsurance arrangements. Not all the issues found are included in the inspection report document. Some serious issues are not even made part of the report at the request of the insurer, they are removed.
The then Chairman of the Insurance Committee, Chiranjeevi Chapagain, said that the tendency of Insurance Authority employees to put pressure on insurance companies and hire their relatives was wrong. ‘Such tendencies affect the rules and supervision of insurance companies,’ he said, ‘and do not send a good message.’
Therefore, Chapagain suggests that the Insurance Authority should formulate and implement a code of conduct to bring its employees to good governance and study the implementation status from time to time. ‘This kind of practice is happening at the international level,’ he said, ‘it should be implemented in Nepal.’
Chapagain informed that when he was the chairman of the Insurance Committee, a separate code of conduct was implemented for employees. ‘It had clear provisions on what employees can and cannot do,’ he said, ‘it would be good if that code of conduct could be updated and fully implemented.’
The then Chairman of the Insurance Committee, Dr. Fatt Bahadur K.C., also said that it was necessary for employees themselves to live in good governance. ‘If employees are not responsible, the regulatory work will be affected,’ he said. ‘Either the insurance authority itself should make policy arrangements to make employees responsible.’
Dr. KC said that when he was on the insurance committee, he had made all employees submit a written self-declaration. ‘I had made them submit a written statement stating which insurance companies or other sectors their relatives have worked in,’ he said. ‘I do not know the current situation. However, employees working in regulatory bodies should have an honest and clean image.’
Insurance expert Rabindra Ghimire says that employees working in regulatory bodies should not pressure insurance companies to give jobs to their relatives in Sourceforce. ‘This affects the monitoring and supervision of insurance companies by the regulatory body,’ he said.
If any employee of the Authority has employed his people in any insurance company, the Chairman of the Authority should alert such employees in a timely manner, Ghimire said. ‘Either the company in which he has employed his people should not send the Authority employees who have employed those companies for monitoring or supervision, or the Chairman should instruct such employees to stop pressuring them to employ their people in any insurance company from now on,’ he said.
Another thing, Ghimire said, is that the Chairman of the Authority should also instruct insurance companies not to employ anyone’s resources.
