Kathmandu. Both sides have been called for discussion for an interim order along with a show-cause order in the name of the government regarding the business allocation of foreign employment term insurance and the operation of the insurance bridge.
Two persons, including a lawyer, have filed a writ petition in the Supreme Court seeking an injunction order. The supreme court has also issued a show-cause notice to the defendants before issuing the interim order and has called them for discussion.
Issuing an interim order in the case filed on July 14, the court had scheduled the first hearing on August 15. The discussion on the writ petition, which was not allowed to be seen on July 15, is now scheduled to be held on July 15.
Advocate Girija Prasad Adhikari and Narayan Prasad Nepal of Palpa had jointly filed the writ petition on behalf of the stakeholders.
The writ has sought a stay on the implementation of the Foreign Employment Insurance Bridge Establishment and Operation Guideline 2081 issued by the Nepal Insurance Authority. NeA had issued this directive with effect from July 1, 2018.
The insurance authority has issued a directive for the establishment of a collective insurance fund (bridge) by violating its jurisdiction.
In the writ petition, sub-section 2 (c) of Section 168 of the Insurance Act 2079 bs provides that the authority to create a group insurance fund will vest with the Government of Nepal. The petitioner has claimed that there is a situation in which the body, which does not have the jurisdiction to create an insurance fund, is issuing and implementing the insurance fund guidelines.
According to the writ petition, the provision of a company collecting insurance fees and contracting with the insured and distributing the insurance fee to the third party (other life insurers and micro insurers) who are involved in the contract is against the prevailing practice. According to the petition, the issue of collecting insurance fees, paying claims is made by one company, but the profits and insurance fees for it are in conflict with other companies under the insurance contract.
Section 65 of the Insurance Act provides that the government of Nepal can implement the rules mentioned in Section 168 only to create a collective insurance fund among the same types of insurers among the companies doing three types of insurance business. NeA has not made any rules from the Government of Nepal for the guidelines related to the operation of the fund.
In the writ petition, it has also been argued that the shareholders will also suffer losses due to the provision of the guidelines for sharing the amount of insurance fee among the insurers even if the petitioners do not sell the insurance policy.
According to the guidelines issued by the NRA, the insurance collected fees will be distributed to all life insurers from the fund through the reinsurance company, but the provision to be borne by the company issuing the liability policy related to the claim is against the insurance contract.
In the writ petition, Nepal Insurance Authority, Government of Nepal Council of Ministers, Ministry of Finance, Nepal Insurance Authority, its Board of Directors, Nepal Reinsurance and Himalayan Reinsurance Limited have been made defendants.
Sun Nepal Life Insurance has been disagreeing with the provisions of the guidelines issued by the Nepal Insurance Authority regarding the operation of the collective insurance fund and the distribution of insurance fees. Sun Nepal has been reluctant to participate in the insurance bridge, saying that even insurers who do not have any contribution to the business have been included in the distribution of insurance income and the impractical distribution ratio has been determined.
Sun Nepal Life has been out of this business for more than three months by closing the sale of foreign employment insurance. Insurer who does not sell insurance policy for three consecutive months automatically insurance
