Kathmandu. The implementation of the National Accounting Reporting System 17 (NFRS 17), a new accounting system for life insurance companies, will delay the annual general meeting of most insurers this time. <\/p>\n
During a discussion between the Executive Director of NEA and 10 Chief Executive Officers on Wednesday, at the initiative of the Life Insurance Association, the insurer pressed for the postponement of the deadline for the implementation of NFRS 17 to the next financial year. The insurer made this demand, citing the inability to prepare the financial statements and hold the general meeting on the stipulated time as there was no preparation for the implementation of NFRS 17. <\/p>\n
According to the provisions of the Insurance Act 2079, the insurer has to prepare the actuarial valuation along with the annual financial statement and balance sheet and submit it to the Authority for approval by the month of Poush. Last fiscal year 2081. The authority had imposed a fine of up to Rs 2 lakh on some insurers as per the provisions of the Act for not submitting the financial statement and balance sheet of the year 2022 on time. <\/p>\n
The National Accounting Board (NCB) has issued guidelines on NFRS 17 for the insurance sector of Nepal for the year 2080. Since 81, the National Accounting Board had issued guidelines on NFRS 17 related to insurance contract to implement it. After the insurer did not implement it within the predetermined time frame, the board has been pressuring the insurer through the authority to implement it. <\/p>\n
The authority has directed to fully implement NFRS 17 from the financial statement of FY 2082. 83. After the directive of the Authority, the insurer has also appointed foreign consultants and financial experts. Insurers also face challenges in maintaining compatibility with the risk-based capital and self-risk ratio structure while implementing NFRS 17. <\/p>\n
Since it is being implemented for the first time in the insurance sector in Nepal, the insurer does not have skilled manpower available for this. Also, the service charge of foreign consultants and technicians preparing financial statements for this system is also expensive. <\/p>\n
The Insurance Authority has provided guidance on the implementation of NFRS 17 through the ‘Guidelines on the Implementation of Nepal Financial Reporting Standard on Insurance Contracts (NFRS 17) for Insurers, 2026 (BS 2083)’ (NFRS 17 Directive of the Insurer). The Authority has already conducted orientation training, interaction and training programs on NFRS 17 for the Chief Executive Officer, Chief Financial Officer and Accounts Officers of the insurer in the presence of foreign experts. <\/p>\n
According to the directive, the financial statement of the actuary has to be prepared and submitted to the authority on the basis of both the financial statement of the insurer, the directive of NFRS 17 and the insurer’s NFRS 17 directive. However, the financial statement based on NFRS 17 will have to be submitted for approval in the general meeting. In the directive, the financial statement of the last fiscal year 2082. The financial statement of the fourth quarter of 83 has also been prepared and submitted in accordance with the provisions of NFRS 17. <\/p>\n
The insurers do not want to implement this accounting system in the current situation as the preparation of financial statements based on NFRS 17 will reduce the distributable profits for the investors. Earlier, the insurer was forced to implement the provision of risk-based capital even though the insurer had expressed technical problems and inability to implement it. <\/p>\n
Sushil Dev Subedi, executive director of the Nepal Insurance Authority, confirmed that he has received a verbal request from the insurer to extend the deadline for the implementation of the new accounting-based system. He said, “They have requested that the financial statements will not be prepared as per NFRS 17 and will be completed for the next year.” He, however, said that the authority is clear about implementing this system as per the predetermined schedule. <\/p>\n
NEA has stated that this system is being implemented with the objective of increasing transparency and credibility in the insurance sector as well as to prepare comparable details in the insurance sector in identification, measurement and insurance policy agreement.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The implementation of the National Accounting Reporting System 17 (NFRS 17), a new accounting system for life insurance companies, will delay the annual general meeting of most insurers this time. During a discussion between the Executive Director of NEA and 10 Chief Executive Officers on Wednesday, at the initiative of the Life Insurance Association, […]<\/p>\n","protected":false},"author":5,"featured_media":315915,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45152,45149,45159,45096,45099,45102],"tags":[],"class_list":["post-315920","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-life-insurance-en","category-laghu-beema-en","category-news-en","category-non-lifeinsurance-en","category-regulatory-en","category-reinsurance-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=315920"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315920\/revisions"}],"predecessor-version":[{"id":315921,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315920\/revisions\/315921"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/315915"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=315920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=315920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=315920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}